Critical Condition

The Death of Employer-Based Benefits Is Nigher Than I Thought

Yesterday, I pointed out that the “excise tax” for not maintaining (what we call today) continuous, creditable coverage would be much lower (maximum $1,900) than the annual premiums for a health-insurance policy. I concluded that Tower Perrins’ September survey of employers, which reported that less than half of employers would continue to offer health benefits if the “pay or play” fine was lower than the cost of health benefits, informs us that we will experience a massive shedding of employer-based health benefits.

$1,900 came from the September 28 Wall Street Journal. However, the version of the Chairman’s mark dated September 22 (but posted on October 2) at the Senate Finance Committee’s website, reports a fine of $750 per adult as of 2017 (p. 35) – and confirms no jail-time for non-compliance with the mandate.

Obviously, this would accelerate the death spiral that I described previously, if the legislation substitutes this ineffective mandate for the current law’s requirement that an individual maintain continuous, creditable coverage.

— John R. Graham is director of Health Care Studies at the Pacific Research Institute.