Health Law’s Requirement Forcing American Employers To Offer Health Care Coverage Puts Jobs, Economy At Serious Risk
Posted on February 28, 2013
WASHINGTON – Today, Senate Finance Committee Ranking Member Orrin Hatch (R-Utah) and Senate Health, Education, Labor and Pensions (HELP) Committee Ranking Member Lamar Alexander (R-Tenn.) introduced the American Job Protection Act, legislation to repeal the job-killing employer mandate that was included in the President’s $2.6 trillion health law, which requires businesses of 50 employees or more to provide health insurance of minimum value or pay a penalty between $2,000 and $3,000 for each employee working 30 hours or more a week. Companion legislation was introduced in the House by U.S. Reps. Charles Boustany, Jr. (R-La.), Pat Tiberi (R-Ohio) and John Barrow (D-Ga.)
“The employer mandate is a drag on our economy, forcing too many of our nation’s job creators to stop hiring and grow their businesses in order to comply with this onerous provision in President’s health law,” said Hatch. “Instead of letting the federal government dictate how employers should allocate resources, lets repeal this job-killing mandate and let businesses get back in the business of hiring.”
“The health care mandate will cause many American businesses to pay a $2,000 penalty per employee rather than provide health care. It will cause businesses that employ many of our lowest-income workers to reduce their number of employees. It will cause many other businesses to reduce the number of hours their employees work,” said Alexander. “On the whole, the mandate means higher costs, fewer jobs, and lower incomes. Repealing the employer mandate will protect American jobs and Congress should continue to work to pass real step-by-step reforms that will lower the cost of health care for all Americans.”
“The employer mandate will freeze hiring for the foreseeable future for our nation’s job creators. It paralyzes businesses from hiring workers and forces many job-seeking Americans from attaining work,” said Boustany. “At a time when the unemployment rate continues to suffer from the ballooning growth of the federal government, the President’s health law compounds the problem by implementing terrible policy. Congress must repeal this mandate and allow job creators do what they do best: expand business and create jobs.”
“I have heard from Ohio small business owners that the uncertainty caused by the employer mandate is limiting their ability to expand their businesses and hire more people,” said Tiberi. “The mandate will increase costs for employers, causing them to cut both benefits and hours for their employees—exactly what we don’t need in today’s economy.”
“The employer mandate is a major barrier to job creation,” said Barrow. “Overly burdensome regulations such as this will force layoffs, halt job creation, and in some cases force businesses to close their doors. Businesses of all sizes in Georgia are already facing too many burdensome regulations from the federal government. We should be working to remove government barriers to job growth, and this legislation is a step in the right direction.”
The American Job Protection Act strikes the provisions in the Patient Protection and Affordable Care Act (PPACA) that forces employers with 50 or more full-time equivalent (FTE) employees to provide health insurance for their employees in 2014 or face a massive tax increase that the nonpartisan Congressional Budget Office (CBO) found would hit employers with $150 billion in new taxes over eleven years. The mandate is expected to lead to an estimated 3.2 million lost jobs, according to the nonpartisan Hudson Institute.
While the employer mandate does not go into effect until 2014, the requirement has already pushed many employers to keep their staffs below 50 or hire part-time workers to avoid the mandate. According to a study by the U.S. Chamber of Commerce, 72 percent of small business owners said that the health care law would make it harder for them to hire. That same study reported, “Many small business owners reported that, in addition to limiting hiring, the new law might force them to reduce the size of their business. For example, respondents reported considering making workers stay under  hours a week or replacing them with temporary or part time workers. A significant number reported the likelihood of canceling insurance coverage for employees, as paying the penalty would be less expensive for their company.”
The bicameral measure has garnered strong support from within the business community and has been endorsed by the U.S. Chamber of Commerce, National Federation of Independent Business, National Association of Manufacturers, National Retail Federation, National Restaurant Association, National Association of Wholesaler-Distributors, International Franchise Association, National Roofing Contractors Association, Retail Industry Leaders Association, Small Business and Entrepreneurship Council, American Council of Engineering Companies, American Hotel & Lodging Association, American Supply Association, American Wholesale Marketers Association, Associated Builders and Contractors, Automotive Aftermarket Industry Association, International Housewares Association, National Club Association, National Council of Chain Restaurants, National Tooling and Machining Association, National Utility Contractors Association, Petroleum Marketers Association of America, Precision Machined Products Association, Precision Metalforming Association, Printing Industries of America, Professional Golfers Association of America, Turfgrass Producers International and Americans for Tax Reform.