One of the foundational lies told by President Obama during the debate over his health care law was that “if you like the plan you have, you can keep it.” Of course, that’s only true if the plan is still offered. Thousands of part-time employees at Wegman’s grocery store chain learned this week that the company would no longer provide health benefits to its part-time workforce.
Currently, Wegman’s offers health benefits to all employees working more than 20 hours a week. The new ObamaCare law requires employers to offer benefits to all employees working more than 30 hours a week. The law goes further, however, and dictates the kind and level of coverage employers have to provide. These costs will likely be higher than current benefits, so the company is adjusting by eliminating benefits for part-time workers.
As evidence of the perverse incentives that arise with government mandates, one insurance broker told the Buffalo News that the part-time workers may actually be better off losing coverage. If their employer offered coverage, the workers wouldn’t be eligible for subsidies on the health exchanges. If the employer drops coverage, however, the workers are eligible for any federal subsidies to purchase insurance.
The taxpayer, of course, is decidedly not better off.
The calculations behind Wegman’s decision are going on in companies across the country. Late last week, the Obama Administration announced it was delaying for one year the mandate that employers provide health coverage for its full-time employees. The delay is due to Democrat fears of wholesale changes to the labor force being made ahead of the 2014 mid-term elections. Wegman’s announcement shows, however, that those changes are coming anyway.
If ObamaCare were intended to eliminate employer-provided health insurance, it wouldn’t be designed much differently. The delay of the employer mandate actually incentivizes this. Employers may not be required to provide health insurance next year, but individuals will be required to have it. This will push millions of workers into the exchanges to purchase their own health care or face escalating penalties.
Since so many will be eligible for subsidies, costs to the federal government will skyrocket. Most of the fiscal estimates of the bill’s impact were predicated on the idea that employers who currently offer insurance would continue to do so.
As the Wegman’s example shows, that clearly isn’t the case.
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