Senators note that ACA measures may negatively affect employers

ACA's fine-based mandate for medium- and large-sized businesses, and the temporary subsidies for small employers combined with the existing tax subsidy and other advantages of bulk- purchasing health insurance, are intended to act as incentives for employers to provide health insurance. Researchers have commented on the impacts they may have on wages, health insurance, and levels of employment. Some of their findings suggest that an employer mandate could increase the covered population but also possibly reduce wages and even hiring.

As a result of such findings, these employer mandates to offer health insurance to employees remains a hot topic not only among employers and health and anti-poverty advocates, but also some legislators. To curb the negative side effects of such penalties if coverage is not offered, some U.S. senators are taking action regarding this aspect of the Patient Protection and Affordable Care Act.

Tennessee Sen. Lamar Alexander, who is one of the leading members of the Senate Health, Education, Labor and Pensions Committee, stated the penalties employers face for failing to offer health plans to their workers negatively affect finances for those companies. Additionally, those measures will likely lead to further unemployment issues nationwide, he stated.

Thus, the senator noted he wants to officially repeal this facet of healthcare reform.

“Under the law, employers pay $2,000 if they do not offer insurance or a $3,000 penalty if they offer the wrong kinds of insurance,” said Alexander. “We are making it more difficult to lower the unemployment rate in this country – which has stayed too high, with more than 12 million people unemployed – when we keep loading up employers with costs that make it more expensive to hire an employee. If we make it more expensive to hire an employee, we don't give the employer an incentive to hire more people – we discourage the employer from hiring more people.”

Alexander isn't the only federal lawmaker to voice opposition and offer a plan to repeal this aspect of the ACA. Kansas Sen. Jerry Moran also stated the employer mandate will spell bad things for the nation's economy. By requiring companies to offer “one-size-fits-all” health insurance plans to their employees, Moran said a significant amount of layoffs and reduced work hours for workers nationwide is likely to take place.

“Increasing regulations and compliance costs for businesses are no way to promote job growth and expansion, and Congress should repeal this damaging mandate,” he said.

Several agencies and organizations have shown support to lawmakers' efforts to repeal the ACA mandate for employers, including the U.S. Chamber of Commerce, National Retail Federation and National Association of Manufacturers. However, some health and consumer advocates and even other senators argue against the repeal of the employer mandate. Proponents of these mandates argue that they could significantly reduce the ranks of the uninsured, since the vast majority of the uninsured – over 70 percent, according to a recent Kaiser Family Foundation study – are in families with at least one full-time worker. These proponents cite that many uninsured are in low-income families, suggesting that mandates may be a useful mechanism for providing insurance for the working poor.

Regardless, this debate is expected continue for some time.