One of the main points of the health insurance reform law was the employer mandate.
The Employer Mandate is a requirement for companies with over (or the equivalent of) 50 full time employees to provide group health insurance. If the group does not provide health insurance, they would pay a $2,000 penalty per full time employee. If the employer offered a group health plan that did not meet the requirements of the new law, then the company could be penalized $3,000 per employee.
Under the employer mandate, if an employee works more than 30 hours a week, then the employer must provide health benefits or pay a $2,000 penalty. This has been a huge nightmare for Indianapolis corporations. There are a lot of local based companies that have a higher hour requirement than 30 hours a week to be eligible for benefits. We have seen a lot of companies move employees that were over 30 hours a week to below the 30 hour mark. Essentially, there has been a trend of pushing employees to part time status so that companies can stay in business. We have seen multiple industries forced to make difficult decisions based on the employer mandate.
It’s difficult for policy makers to understand the true cost of insuring employees. In a lot of self-funded cases, it’s not about the premium, but it’s about the claims. There are also a lot of industries that have had a difficult time sponsoring a group health plan because of cost and participation. The employee can’t afford to pay the premiums and the employer’s business model does not include a benefit package.
The employer mandate would have a negative impact for all of these industries. The frustrating part about this is the current administration has down played these issues since the inception of the law. The fact that they have finally looked at possible impacts is a good start.