By Amy Payne
The Heritage Foundation
It seems that every day now brings another business owner in the news talking about cutting workers’ hours or making other cost-cutting moves in anticipation of Obamacare’s impact in 2013.
Here are just a few of the business owners’ comments on the health care law:
Heritage’s Alyene Senger explains that these businesses are responding to Obamacare’s employer mandate, which has a job-killing effect:
Obamacare requires all businesses with 50 or more full-time employees to provide health coverage for their workers or pay a $2,000 penalty for each employee after the first 30 workers. The employer mandate creates incentives for businesses to avoid higher costs by, for example, hiring part-time employees instead of full-time employees, since businesses will not be penalized for failing to provide health insurance to part-time employees….Businesses can also avoid penalties by keeping the number of employees under the mandate threshold of 50, which further discourages creating new jobs.
These businesses’ plans are only the effects based on what we know about Obamacare. There are still many, many crucial details that we don’t know. Health and Human Services (HHS) just released some of the new rules that will govern what kind of coverage insurers must offer —and Heritage’s experts are still going through the 300-plus pages of regulations to sort out what they mean.
In the meantime, forget President Obama’s “if you like your plan, you can keep it” promise. Two government agencies have estimated that more than 11 million people will no longer have their employer-sponsored health coverage once Obamacare is fully implemented. Other studies have put that number much higher.
With employers dumping employees into government-run insurance exchanges or Medicaid (which are still unsettled proposals), the future of health insurance will be taxpayers footing the bill. This is a huge money problem on top of the skyrocketing entitlement programs that already exist. But on a personal note, it’s not the best solution for the under-employed or under-insured.
Take Dave Willingham, a 32-year-old interviewed by Huffington Post after taking a job at a community college cafeteria in Washington State. “When he recently accepted his job after a bout of unemployment, he was told up front that he would not be getting more than 19 hours per week. That’s because workers who average 20 hours per week qualify for benefits like health care, vacation and sick pay, he said.”
In his cafeteria job, Willingham earns a little more than minimum wage and receives food stamps. But this isn’t the situation he wants for himself:
“That subsidy is a huge blessing for me,” Willingham said. “But at the same time, I’d rather have the agency and dignity that would come with actually having more money coming in and getting to make that decision for myself….Ultimately, it would be nicer to feel more in control of my own life and destiny.”
Becoming dependent on the government for health care is not a step toward personal control or an improved life situation for workers like Dave Willingham. But sadly, that is exactly where Obamacare is taking hourly workers.
Obamacare and the Employer Mandate: Cutting Jobs and Wages by Brian Blase