Is it time to require all employers to provide health care for their employees?
Having just returned from a conference at Oxford University in England where we were discussing the effect of pension and health liabilities on global competitiveness, I have been thinking about the question of how our current voluntary benefits system affects intra-business competitiveness within the US, an often overlooked aspect of the problem.
Instead of fussing with the question of what, if anything, should the states be able to do to reduce the number of uninsured individuals and getting all tangled up in ERISA preemption questions, is it time for Congress to consider the question of whether all employers should have some responsibility for financing a portion of health care costs for their employees? Should Congress, as part of a broader health care reform proposal, consider adopting a Federal "pay" or "play" approach whereby all employers would have the choice of providing benefits that cost X (e.g., X cents/hour, X percentage of payroll) or contributing an equivalent amount to a public insurance pool under which all individuals without insurance would obtain coverage? If employers should continue to be in the mix at all in the future, would that be a fairer way to equalize the funding of the system, rather than letting employers that voluntarily provide coverage for their employees continue to subsidize other employers that don't through cost-shifting?
Phyllis Borzi
I think Phyllis is right that looking to states to solve the problem of the uninsured is a distraction, especially given ERISA preemption.
But I don't agree that pay or play is the best solution if we want to increase U.S. competitiveness. It is in effect a tax on labor-instensive businesses. Single payer, or a mandate for individual insurance, create more of an even playing field for all businesses.
Posted by: Norman Stein | June 29, 2008 at 05:11 PM
If Congress were to pass legislation that requires employer to pay or play, you will see many smaller employers cut back on hours so employees would not qualify (look at Hawaii and their mandates). Even if they didn't you would still have the issue of people who would not enroll in the insurance. That is part of the problem now - even for people eligible for a publicly funded plan - some people just don't want to be told what to do.
The proposal by Senator Clinton that would mandate coverage is likely not constitutional and would be impossible to enforce. People are supposed to have car insurance yet many don't. Until you find a way to convince people that it is the prudent thing to do and would actually save money for everyone in the long run we will have uninsured people.
In a world where there is a new gotta have gadget introduced every couple of months that clamors for our attention and dollars - convincing people to re-prioritize is an uphill battle.
Posted by: Beth | June 26, 2008 at 02:53 PM