Study: Obamacare Employer Mandate Will Disproportionately Hurt Low-Wage Workers

Obamacare’s twice-delayed employer mandate will hit low-wage workers the hardest, according to a study released Friday.

The Robert Wood Johnson Foundation and the Urban Institute released a report examining the effects of repealing the employer mandate or moving ahead. The employer mandate peg of the health care law will barely affect the uninsured rate, researchers found.

“Employers with 50 or more workers not offering coverage pre-ACA are the same employers that are highly likely to not offer in the future, therefore incurring the ACA’s penalties. Because the non-offering firms are much more likely to be firms dominated by low-wage workers, low-wage employees will bear the greatest brunt of the penalties imposed,” the study found.

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The study acknowledges an argument often advanced by both conservatives and businesses that hiring will likely be stunted by the arbitrary cut-offs in the mandate, imposing different requirements and starting dates for companies employing with below 50, 50-99, and 100-plus workers.

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But the federal government expects to gain billions in penalty payments from companies that choose not to obey the mandate in the end. These costs “are likely to be passed back to the workers in the form of reduced wages,” particularly low-wage employees.

Few workers would lose health coverage in the absence of the mandate. Were it entirely eliminated, employer coverage would fall by just 500,000, according to the study; nongroup coverage would correspondingly rise by 300,000 and Medicaid would grow by 100,000 people. The net increase in the uninsured would be just 200,000 — a relative hike of just 0.6 percent.

The Robert Wood Johnson Foundation (RWJF) is a supporter of the health care law. It donated $13 million to Enroll America, a White House-connected nonprofit promoting Obamacare enrollment, after outgoing Health and Human Services secretary Kathleen Sebelius requested the funding from top executives, according to a recent federal report. (RELATED: Report: Obamacare outreach group gets $13 million at administration’s request)

They’re not the first pro-Affordable Care Act contingency to advocate trashing the employer mandate, once considered a key component of the health care law. After the Obama administration’s initial delay of the mandate last July, notorious Obamacare supporter Ezra Klein advocated at the Washington Post for the mandate’s repeal.

“Frankly, eliminating it — or at least utterly overhauling it — is probably the right thing to do,” Klein wrote. “It’s a bad bit of policy.”

It’s one of the few areas of Obamacare policy where both sides of the aisle can agree. Since the Clinton administration, conservative organizations have vehemently opposed the prospect of an employer mandate — and after two delays of Obamacare’s, former supporters are rethinking it as well.

“Eliminating the employer responsibility requirements should substantially diminish employer opposition to the ACA,” the study concluded.

While businesses and much of the public would likely welcome dumping the mandate, it would require raising another $46 billion in taxes over the next decade to even things out. The federal government expects to raise serious cash from businesses that don’t comply through penalty payments. In the absence of the mandate, Medicaid and Obamacare enrollments (likely with subsidy payments) will probably rise slightly.


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