Obamacare Employer Mandate Failing to Help Many Workers


The employer mandate part of Obamacare was hailed as one of the important hallmarks of Obama’s nationalized socialist healthcare system, along with the contraception and individual mandates. As of January 1 of this year every employer with 50 or more full-time employees was mandated to provide healthcare benefits to their workers.

Full-time was defined as 30 or more hours per week, prompting many employers to cut employee hours to less than 30 hours per week, resulting in many Americans taking a 25% or more cut in pay, which many of them could not afford. Other employers laid workers off and some knew that they could not afford the additional cost of healthcare benefits so they either sold their business or closed their doors.

However, many companies decided to bite the bullet and offer the required healthcare benefits as mandated. One of those employers is Billy Sewell who owns 26 Golden Corral franchises in six Midwestern and Southern states. He employs around 1,800 people and prior to the mandate, he only offered healthcare benefits to salaried management.

Once the mandate took effect, Sewell complied and offered healthcare benefits to his 600 service workers. At the time, he estimated it would cost him over $1 million to comply and wasn’t sure that his narrow profit margin could afford such an expense and if he could remain in business. To meet Obamacare employer mandate requirements, Sewell agreed to pay 65% of the cost for each employee.

Nearly ten months later, Sewell is surprised to discover that only 2 of the service workers took out his employer provided healthcare benefits. Most of them are low-income employees who still cannot afford the supposedly affordable healthcare. After Sewell pays 65% of the cost, the employees are left with a monthly cost of $140, split between 2 paychecks. The out of pocket deductible is only $2,500 per year, which is quite low compared to many employer policies I’ve heard of.

Analysts are finding that many low-income workers are refusing to take the employer provided healthcare benefits because they simply can’t afford them. One Golden Corral server, said:

“It’s either buy insurance or put food in the house.”

She said if anyone in the house gets sick that it’s cheaper to visit a local clinic that uses a sliding scale. Between her job at Golden Corral and her husband’s part-time job at Walmart, they only pay $25 per visit at the clinic. Most of their prescriptions are only $4 at Walmart.

Another employer, Brad Mete with Affinity Resources also started offering healthcare to employees in January because of the mandate and finding the same thing that Sewell is finding. He said getting his employees to purchase his employer provided healthcare is like ‘pulling teeth.’ Many of them only make $300 per week before taxes and they say they can’t afford to spend $30 of that a week for health insurance.

If you think that these low income employees would be eligible for federal subsidies to help pay for their healthcare you would be wrong. The subsidies apply to private insurance policies, not to employer provided ones, leaving low income workers on the hook for whatever their employer’s don’t pay for.

But don’t forget that even though employers are supposed to provide coverage for no more than 9.5% of the annual household income, they also get penalized if they pay too much for employee coverage, known as the Cadillac Tax. Most employers don’t know the total household income so they have no idea if they are complying with the mandate or not.

I’ve lost count of how many different ways the Affordable Care Act has failed, but I wish I had a thousand dollars for each failure I’ve reported on over the past couple of years. On the flip side, I wish I had a million dollars for each success I’ve reported on as I could afford to retire, but alas, I don’t recall ever reporting a single success story for Obamacare, so I keep on writing.

 

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