States Threatening To Compel Employers To Provide Health Insurance
Pressure on employers is mounting as 30 states consider legislation that would require businesses to provide health insurance to workers, contribute to the cost of covering the uninsured, or otherwise penalize companies employing uninsured workers, according to a report released by the HR Policy Association.
As the number of Americans who have no health insurance continues to grow, state public assistance programs are struggling to meet the demand for coverage. In an effort to address this problem, bills have been introduced in state legislatures that would force companies to play a greater role in providing insurance for workers who are not currently covered.
After analyzing the reform initiatives pending in legislatures across the country, the HR Policy Association reported that the bills generally fall into three basic categories. The first approach, known as the employer mandate, would compel companies to provide health insurance to their employees, or pay the state for the cost of covering the uninsured. These initiatives generally require employers that do not provide health care to their workers to pay an additional tax or contribute to a fund that would be used to cover the cost of insuring workers.
Other proposed employer mandate laws would require employers to reimburse the state for providing Medicaid or other forms of public assistance to their employees. Yet another type of employer mandate would require businesses that do not provide insurance to pay a higher "living wage" to their workers as compensation. The report noted, however, that these laws would not compel workers to spend their additional wages on health insurance.
Among the states considering employer mandate legislation, according to the report, are New York, Massachusetts, Oregon, Arizona, and Washington.
A second category of legislation, the report said, involves conditioning state benefits and contracts on health care coverage. Under these proposals, employers would have to provide health insurance to their workers in order to be eligible to do business with the state or gain access to certain tax breaks.
Some of the bills in this second category propose making the provision of employee health insurance a precondition for companies to receive certain types of loans or to participate in business development programs. Other proposals would require the state to give preference to, but not exclude completely, companies offering employee insurance when selecting the beneficiaries of these programs. The states considering these kinds of bills include Georgia, New Jersey, Connecticut, Utah, and Vermont.
The third category of proposed legislation is the required reporting of employees on public assistance. Instead of compelling employers to offer health insurance to their workers, these laws would attempt to "shame" them into doing so. Some of these proposals call for the publication of a list of the names of companies employing uninsured workers, along with an accounting to the state of the cost of providing health benefits to these workers.
Some states already have these laws in place, including Massachusetts, which issued a list in February. The report listed each employer employing a Commonwealth resident in need of public state assistance. Massachusetts officials calculated the total cost to the state of insuring employees and their dependents, whose employers failed to provide such insurance, at $52 million dollars in 2004. This report, however, did not exclude those employees whose employers offered insurance but who opted against selecting to participate in their company’s plan.
Because legislation like this generally does not arouse much opposition, more states have introduced more "name and shame" measures than other types of reform. Already, 20 states are considered and reviewing making "name and shame" legislation part of their ongoing attempt to insure their residents. According to the report, these states include California, Connecticut, Florida, Hawaii, Minnesota and New Mexico, among others. The report from Massachusetts did not indicate whether such methods would prove 100% effective in the attempt to regulate the way in which employers offer insurance options to their employees. Only time, and further studies, will tell.
