Editorial: It's time to ponder separating health insurance from work

FresnoJuly 10, 2013 

In the United States, 98% of firms with 200 or more workers provide health insurance coverage (97% in California). Similarly, 94% of firms with 50 to 199 workers provide coverage (92% in California).

Under the Affordable Care Act, businesses with more than 50 full-time workers that were not offering coverage — primarily restaurant and retail chains and farms — were supposed to offer coverage by January 2014 or face fines of $2,000 to $3,000 per worker. This was to recoup the cost of publicly subsidized coverage for uninsured workers.

Two days before the July 4 holiday, however, the Obama administration announced that it would delay the large-business requirement by one year, until 2015. For California workers who are uninsured, this has no impact at all. They will still be able to get insurance coverage in the state exchange — with enrollment to begin Oct. 1 and coverage to begin Jan. 1 — or through expanded Medi-Cal.

For large employers, the one-year delay means no penalties for not insuring workers in 2014. On the upside, this means more time to work out the simplest way for large employers to report the coverage they offer to their workers.

On the downside, the one-year delay means that the public picks up the cost for workers who get subsidized coverage in the exchange or in Medi-Cal. It also means that large employers that don't offer insurance continue to have an edge in costs over those that do offer insurance.

The Affordable Care Act aims to level the playing field between businesses and prevent cost-shifting to taxpayers, while ensuring that workers of all incomes get coverage. At stake is a principle. Of 210,000 businesses in the United States with more than 50 employees, only 10,000 don't offer coverage. Should they be let off the hook?

Over the long run, we might be better off with a system in which people buy insurance on their own — with a menu of choices in the state exchange and continuing coverage as they change jobs — rather than obtaining insurance through an employer. That conversation should begin in 2014, as we see how many people buy insurance in the exchange and whether they are happy with it.


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