What Delaying the Health Care Law's Employer Responsibility Requirement Means for Real People
Yesterday's surprise announcement that the Obama Administration is postponing implementation of the health reform law's requirement that firms with more than 50 workers provide affordable, comprehensive health insurance or pay a small penalty set off a flurry of commentary and speculation. Much of this reaction focused on how the decision will affect larger employers and their workers — that is, very little — and others weighed in on the political implications of this move. The biggest impact on large employers is if they do not provide the requisite health insurance they will not have to pay the penalty for one more year. But little analysis and commentary considered what this decision means for low-wage workers' access to health insurance exchanges, nor the outreach and education challenges it creates.
With or without this postponement, beginning January 1, many workers whose employers do not offer coverage, or whose employer offers coverage that does not meet minimum standards for premium affordability and sufficient benefits, will qualify for help with premiums and cost-sharing for coverage they purchase in the health insurance exchange operating in their state. These marketplaces will offer participants a choice among fully-vetted health plans that meet state and federal standards. Workers with good employer-sponsored health insurance won't be able to receive subsidies to purchase coverage in the exchange, but those workers without access to good employer-sponsored coverage, or coverage that exceeds 9.5 percent of their incomes, will qualify for this help.
Today, low-wage workers are more likely to pay a larger share of the premium for employer-sponsored coverage than workers with higher earnings. According to last year's Kaiser/HRET Survey of Employer Benefits, firms with many workers who earn $24,000 or less require their workers, on average, to pay 34 percent of the total health insurance premium. In contrast, firms with few low-wage workers ask their employees to cover only 28 percent of the premium. The difference is even starker for firms with fewer than 200 workers. With the average premium for family coverage clocking in at $15,073, this means that workers earning $24,000 a year are asked to pay, on average, $5,125 for family health insurance, or 21 percent of their income. Higher-wage workers pay nearly $1,000 less. In the exchange, a family's premium will not exceed 9.5 percent of their income if they qualify for a subsidy — clearly a better deal.
None of this changes with yesterday's announcement. Other much-needed changes will also remain in place. For example, small businesses will still have an improved marketplace where they can shop for coverage; the majority of employer-sponsored plans will still be required to cover preventive services, and plans in the individual and small group markets will still be required to charge men and women the same premium and cover maternity care.
But in the absence of the employer requirement to provide adequate coverage or pay a penalty, workers may not realize that they are still individually required to hold coverage, nor that they have an alternative coverage option. To the degree that the public believes "Obamacare isn't being implemented", outreach workers, enrollment assisters and others who will be working hard to help individuals apply for and enroll in coverage will have another educational barrier to overcome. To overcome this problem, these assisters will need new strategies to reach women who work low-wage jobs and their families.