Why Not Just Eliminate the Employer Mandate?

Brief

Why Not Just Eliminate the Employer Mandate?

Abstract

Employers of 50 or more workers are required to provide health insurance or pay a penalty. This requirement has been delayed until 2015 for employers with 100 and more workers and until 2016 for those with 50-99 workers. But there are reports of changes in employer labor practices, such as reducing the hours of part-time workers and concerns about increasing workforce above 50 workers. In this brief we argue that the employer mandate should simply be eliminated. We show that it would not reduce insurance coverage significantly, but it would eliminate the labor market distortions that have troubled employer groups and that could have negative effects on some workers. The penalties on employers do bring in some new revenues that would have to be replaced.

Research Area: 

Centers

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