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Could this nudge employers to drop covering employees health care plans?

Employer Mandate Excise Tax (Page 275-276):
If an employer does not pay 72.5% of a single employee’s health premium (65 percent of a family employee), the employer will be obliged to pay an excise tax equal to 8 percent of avg. wages.
Small employers (measured by payroll size) have smaller payroll tax rates of 0% (<$500,000), 2% ($500,000-$585,000), 4% ($585,000-$670,000), 6% ($670,000-$750,000).

If it is economically feasible for the employer to opt out of paying premiums by paying this tax, could this lead to people potentially running the risk of their employer dropping from their existing plan to save the company money?


Asked by grlygrlz2 at 2:45 PM on Oct. 31, 2009 in Politics & Current Events

Level 39 (106,530 Credits)
This question is closed.
Answers (10)
  • What I want to know is why no one has responded to your post?! Could it be because the "regular naysayers" know this is very likely to happen, and they "got nuthin?!" LOL :o)

    I agree that it won't take much of an incentive for employers to drop expensive health care subsidies in favor of a small "fine" of sorts--especially in THIS economy! Hmmmm...72% or 8%? It doesn't take a brilliant business mind to figure out the most cost-effective solution!!!

    Answer by LoriKeet at 4:43 PM on Oct. 31, 2009

  • Perhaps They are too busy stroking someone's ego over debating??? :o)

    Answer by grlygrlz2 at 4:50 PM on Oct. 31, 2009

  • I agree with both of you. It DOES encourage companies, especially those with a lot of low-paying labor jobs, to drop their health coverage.

    Answer by mancosmomma at 5:07 PM on Oct. 31, 2009

  • possibly yes, jobs are scarce. if they still are when/if it takes effect, then they may rationalize people will not quit even though essentially their pay just plummeted if they lose insurance. the policy my dh (company pays most) has for our family  is worth a lot of $, i doubt the company is going to pay him the difference.


    Answer by BandME at 6:18 PM on Oct. 31, 2009

  • It will. If the tax is lower than what the insurance company has to pay for the healthcare coverage then they'll definitely get out of the healthcare coverage. Companies care about money, not about the worker (in the majority of cases).

    Answer by amyrw at 10:12 PM on Oct. 31, 2009

  • Or perhaps some of us have been busy today?

    Yes. As a matter of fact, I believe it WILL nudge employers that way, as it will probably be more cost-effective to pay the tax. Doing the employer would have paid less through the tax than they did the way they were already set up. Maybe they'd have stayed in business had they had that option available to them.

    Answer by gdiamante at 1:44 AM on Nov. 1, 2009

  • I was missing a word last employer. My current employer pays 100% of my coverage.

    Answer by gdiamante at 1:45 AM on Nov. 1, 2009

  • THIS is exactly how the libs and supporters of Obama/PelosiCare are buying into the rhetoric that states they will not force employers to drop their private health insurance plans for their employees. No, the government won't do it DIRECTLY, they'll just present very attractive incentives to employers to be the "bad guys!"

    It'll be an "end around" approach. Then the private insurance companies will be unable to enroll or re-enroll their dropped subscribers, which means they won't have the operating capital they need from premiums, and will go out of business.

    Eventually we'll ALL be on the government plan, and be under their control. The government also wants the 20-somethings to pay for insurance since they are the least likely to get sick or need medical care, so their premiums keep the government program afloat.

    Why the libs don't see it, I don't know. I guess the old saying "love is blind" really is true! LOL

    Answer by LoriKeet at 7:38 AM on Nov. 1, 2009

  • I suggest you go back and read those two pages again because your information is WHOLLY inaccurate. I don't know where you pulled that 72.5 and 65 number from because its not even mentioned.

    You can speculate all you want as to whether or not employers will drop their cpverage, but next time try interpreting the bill correctly

    Answer by SRiveroC at 5:42 PM on Nov. 1, 2009

  • grlygrlz2

    Answer by grlygrlz2 at 9:40 PM on Nov. 3, 2009