On Businesses and the ACA

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I appreciate the basic premises of the Affordable Care Act: the mandate for individual coverage and an insurance company inability to deny coverage to individuals with a pre-existing condition. Therefore, I look for these two points in any amendment or replacement.

There’s no question about the following:

• Rising cost of health care insurance to all – including companies and individuals
• Given a global economy, the company’s expense burden of healthcare insurance for employees is a burden many non-US competitors may not incur
• The ACA requires employers (based on the number of employees) to provide healthcare insurance to employees
• Over the past 10+ years, US employees have accepted an increasing cost burden of healthcare insurance

To me, the ACA’s employer mandate is an example of an unnecessary mandate and government overreach. Then again, given the Democratic majority that passed this law, I see it as another example of Democrats trying to do too much.

I offer a suggestion, and one that employees won’t like – but businesses would love. The Republicans won’t like it either because they couldn’t accept the two key points that I stated at the beginning. It’s also doubtful that Democrats would embrace the idea because it would amend what they created and they are less likely to pass the burden to individuals. In other words, it’s time to look outside the box.

Note: For the sake of this post, employees refers to full-time employees, which I define as those working 35 hours per week or more.

1. Congress passes legislation to remove the employer mandate, thus companies have no obligation to provide healthcare insurance to employees.
2. Therefore, given the ACA’s individual mandate, it is each individual’s responsibility to get healthcare insurance.
3. In collective bargaining situations, the union and employer may negotiate coverage. If so, the burden of the negotiated coverage on the company and the employee is only with the employees covered by the collective bargaining agreement (CBA) (which is existing labor law).
4. Outside of theCBA, employers would be
   1. under no obligation to provide healthcare insurance or Health Saving Account (HSA) benefits
   2. If the company provides any benefit of healthcare insurance or HSA to any employee, all employees not covered by the CBA receive the same package without exception. (That is, if the CEO gets something special, the same goes to all employees.)
   3. If the company decides to provide a fixed amount to all employees to go toward the cost of the employee’s healthcare benefits, that’s OK as long as the amount is the same for all.
5. If a person chooses not to purchase healthcare insurance, they are fined at a price that is higher than the cost of insurance.
6. Determining how to fund a tax credit for individual purchases would be a noble cause.

Yes, this would level the playing field for US companies in the global marketplace – and smart companies would boost salaries. On the other hand, the action amplifies another problem – the people of the US would be carrying a burden that other citizens in primary markets throughout the world don’t have – thus, a dilemma remains.