Obamacare Mandates Kick in Today; Good Luck with Your Coverage

Starting today, the mandatory women’s coverage provisions of the Affordable Care Act (an oxymoron if there ever was one—let’s call it “Obamacare”) go into effect across the country. The Obama administration, of course, is exuberant: “47 million women are getting greater control over their health care ...”. (For a more balanced view of what is taking place and when, see this fact sheet, which has links to all the operative provisions of the law and the regulations published thus far.)

The Administration, as usual, is running a con game. Built into Obamacare is an incentive to employers to drop their employee health insurance policies altogether, and to throw their employees into the maelstrom of a federal government insurance pool, where one size of policy will fit all.

Here is how it will work, as explained in this article, from the blog of the Heritage Foundation (be sure to follow the links, too):

What happens starting today?

Today signals the beginning of a season of impossible decisions for employers who, for reasons of conscience, have not been paying for abortion-inducing drugs, contraception, or sterilization for their employees. Employers are now required to offer these services for “free”—meaning the employers pick up the cost of including these services in their health insurance plans. At the renewal of their health plan years, the HHS mandate will force employers into an untenable choice: violate their deeply held beliefs or forfeit the provision of health insurance altogether and risk steep fines.

Who are these victims of Obamacare’s trampling on faith? Family business owners who are producing jobs and growing the economy, Catholic social organizations that provide invaluable services to their communities, and evangelical colleges and universities educating the next generation, to name just a few. The Obama Administration says that business owners’ rights to religious freedom shouldn’t cross into their everyday lives, claiming that “for-profit, secular employers generally do not engage in any exercise of religion protected by the First Amendment.”

If employers don’t comply, what happens to them?

If employers don’t change their plans, they will be hit with fines—up to $100 per employee per day. But if they stop providing health coverage, Obamacare’s double whammy means that employers with more than 50 employees could instead be hit with fines for that.

For many, the level of these fines would mean going out of business. Applying the $100 per employee per day fine to Hercules Industries, for example—the family-owned business with 265 employees that is challenging the mandate in Colorado—would mean a fine of $800,000 per month—almost $10 million per year.

If Hercules were to drop its health coverage, forcing its employees into government-run exchanges under Obamacare, it would face a fine on faith of approximately $2,000 per employee per year, for a total of $530,000 per year.

Did you catch that? If employers add the newly mandated coverages to their existing policies, they will have to pay more (because the insurers will recoup those costs in overall program costs), but they (and the insurers) will be prohibited from passing on the specific costs of the mandated coverage to their employees. And if they do not provide the mandated coverage, they will be fined $100 per employee per day. That makes a fine of $36,500 per employee per year, or tens of millions of dollars per year for large companies.

But if, instead of paying for the newly mandated coverage, the employer decides to stop paying for employee health care coverage altogether, the fine is $2,000 per employee per year—or eighteen times less than the penalty for providing some coverage which does not include the mandated parts.

Tell me: if you were a business owner, what would you do? Currently, your yearly cost for employee health care runs from $6000-$12000+ per employee, depending on where your business is located. The insurance companies have just announced an increase in those premiums (not specifically for the mandated coverage, of course, but to cover “increased general health care costs”).  But you can get out of that burden by contributing just $2,000 per employee per year to help finance the government-run insurance pools.

The decision is a no-brainer. The provisions of Obamacare which impose the different fines and penalties were intentionally written so as to impel employers into dropping their policies, and now that is what will start happening.

But remember—Obama promised that you would be able to “keep your health care policy” under his new law. Well, it turns out you can—but only for the next nine months or so. He didn’t tell you that, because he hopes that by then, you will have re-elected him, and he will be safely beyond your anger and frustration.