House Ways & Means Releases Report on Employer Health Coverage

The majority Republican staff of the U.S. House of Representatives Ways and Means Committee has released a report, Broken Promise: Why ObamaCare Will Force Americans to Lose the Health Care Coverage they Have and Like, surveying 71 of the Fortune 100 companies on the probable cost impact of the ACA.

The report’s key finding is that the 71 companies surveyed could collectively save an estimated $28.6 billion in 2014 alone (and $422.4 billion from 2014 to 2023) by eliminating health insurance coverage for their more than 5.9 million U.S. employees and instead paying the $2,000 (in 2014) per full-time employee fine under the ACA (the "pay or play" provision). Individually, these major employers could save an average of $402.3 million in 2014 alone (and $5.9 billion from 2014 to 2023). The report states: "The Democrats’ health care law contains a number of policies that create perverse financial incentives for employers to stop offering health insurance to their employees, perhaps none more so than the employer mandate,” the report says.

While the report describes the cost savings that would result from dropping coverage, it does not assert the likelihood of these companies to do so, nor does it address various ancillary matters that would provide context for such a decision. For example, the Congressional Budget Office (CBO) has consistently assumed in its official estimates that most employers would be compelled to increase wages or other compensation, plus pay a penalty, if they chose not to provide health coverage. While this assumption may or may not be correct, it is not addressed by the Ways and Means report or figured in its calculations. In fact, as the Ways and Means report makes clear, these employers were not actually asked if they were likely to drop health coverage or the circumstances under which they might do so.