The Patriot
03-10-2010, 03:05 PM
This excerpt comes from a Heritage Foundation analysis on the Senate Healthcare bill.
"There is another catch. An employer who offers qualifying insurance must pay a penalty of $3,000 for every employee from a low-income family who qualifies for and accepts a premium subsidy in the "health insurance exchange."[23] The employer's total penalty is capped at $750 times the total number of full-time employees if more than a quarter of the employees receive the subsidy.
In summary, if a company employs many low-income workers, it can save money by dropping its health plan and paying the $750-per-employee tax or by reducing as many employees as possible to working part-time. However, if a company has mostly middle-income workers, it faces a $3,000-per-year penalty for hiring a worker from a low-income family who elects the subsidy. Also, this penalty applies to the employee's family income, not the income that the employee is paid by any particular company.
Therefore, a company would save $3,000 by hiring someone with a working spouse or a teenager with working parents whose family income is higher instead of a single mother with three children. Even worse, if one-fourth of its employees qualify for a premium subsidy based on income and family size, the company would still pay the $750-per-employee tax whether it offers insurance or not."
http://www.heritage.org/research/healthcare/bg2353.cfm
Essentially, a business owner is punished for hiring low income unskilled workers and insuring them. If 1/4th of his workforce is low income workers who qualify for the subsidy he has to pay 3,000 dollars for each of them on top of 750 dollars for every full time employee. Even if they don't offer insurance and make an effort to hire low income people they will have to pay 3,000 dollars for each of them. This convoluted tax code will incentivize the hiring of union members and the unemployment of low income non union members. I am sure this isn't a coincidence. This bill also incentivizes businesses to cut wages and full time employment to avoid the new taxes. Businesses owners will cut to avoid the new taxes as happens every time with new taxes and pass it on to employees and the consumer and the money will never be raised, resulting in lower revenues and larger deficits.
"There is another catch. An employer who offers qualifying insurance must pay a penalty of $3,000 for every employee from a low-income family who qualifies for and accepts a premium subsidy in the "health insurance exchange."[23] The employer's total penalty is capped at $750 times the total number of full-time employees if more than a quarter of the employees receive the subsidy.
In summary, if a company employs many low-income workers, it can save money by dropping its health plan and paying the $750-per-employee tax or by reducing as many employees as possible to working part-time. However, if a company has mostly middle-income workers, it faces a $3,000-per-year penalty for hiring a worker from a low-income family who elects the subsidy. Also, this penalty applies to the employee's family income, not the income that the employee is paid by any particular company.
Therefore, a company would save $3,000 by hiring someone with a working spouse or a teenager with working parents whose family income is higher instead of a single mother with three children. Even worse, if one-fourth of its employees qualify for a premium subsidy based on income and family size, the company would still pay the $750-per-employee tax whether it offers insurance or not."
http://www.heritage.org/research/healthcare/bg2353.cfm
Essentially, a business owner is punished for hiring low income unskilled workers and insuring them. If 1/4th of his workforce is low income workers who qualify for the subsidy he has to pay 3,000 dollars for each of them on top of 750 dollars for every full time employee. Even if they don't offer insurance and make an effort to hire low income people they will have to pay 3,000 dollars for each of them. This convoluted tax code will incentivize the hiring of union members and the unemployment of low income non union members. I am sure this isn't a coincidence. This bill also incentivizes businesses to cut wages and full time employment to avoid the new taxes. Businesses owners will cut to avoid the new taxes as happens every time with new taxes and pass it on to employees and the consumer and the money will never be raised, resulting in lower revenues and larger deficits.