More numbers

Via PJ:

employers with 50 or more full-time workers must provide health insurance for all their workers, paying at least 65% of the cost of a family policy or 85% of the cost of an individual plan. Moreover, the insurance must meet the federal government’s requirements in terms of what benefits are included, meaning that many businesses that offer insurance to their workers today will have to change to new, more expensive plans…In New York, the average employer contribution for employer-provided insurance plans, runs from $4,567 for an individual to $ 12,748 for a family. Many companies will likely choose to pay the penalty instead, which is still expensive — $2,000 per worker multiplied by the entire workforce, after subtracting the statutory exemption for the first 30 workers. For a 50-person company, then, the tax would be $40,000, or $2,000 times 20…Individuals and families who will be forced to buy their own insurance when companies drop their health insurance plans will be in for a shock. Even with subsidies, some families will end up paying nearly 10% of their gross income for health insurance.


If…your employer drops coverage, your options will be enrolling in Medicaid (if you’re eligible) or buying a government-approved health plan on your state health exchange. What’s an insurance exchange? It’s like a supermarket that only sells cereal. The exchange will sell only the government-designed plan. In most states, exchanges will be an 800 number, a Web site and a government office, like the DMV. People with household incomes up to $92,200 will be eligible for a subsidy.

All this fun takes place before the midterm elections.

3 Responses to “More numbers”

  1. Andrew_M_Garland Says:

    The federal government continues to explore macroeconomics by doing massive experiments on the populace. There would be no other way to resolve certain economic questions without it.

    The penalty “on the employer” for not providing health insurance is a complicated brew, up to $2,000 per employee. We will be able to measure experimentally the comparative elasticity of labor supply, labor demand, and investment demand. In simpler terms, we will find out how much of the penalty creates lower wages, creates a lower return on investment (and less investment in new jobs), and/or produces higher prices. The data will be a boon to economics professors, who will study it for years. (sarc)

    It may seem that the employer is paying for most of health insurance. But, all costs of employing people, including health insurance, are paid for out of the production of the employee. If the employer did not pay for health insurance, then that part of employee compensation would be added to the cash wage, through competition for workers.

    The penalty will mostly reduce cash wages by $2,000 yearly. Any increase in insurance costs mandated by ObamaCare will also mostly reduce cash wages. Companies are finding ways to limit their costs under ObamaCare because they don’t want to directly reduce wages and they want to stay in business.

    Ironically, if an employer-provided health benefit costs less than $2,000, the employee’s salary might go up by the savings. But, the employee will then have to buy insurance at an exchange. The employee is effectively taxed $2,000 at work, to be given a subsidy at the exchange. People will never understand this complexity.

    Company Paid Health Insurance is Part of Your Salary
    12/2008 – Easy Opinions – Some detail about who pays for what.

    Obamacare: What the Future Holds
    03/23/10 – Econlog by Bryan Caplan – A nice review of ObamaCare penalties and incentives.

    ObamaCare will cut jobs and wages
    01/2011 – Heritage – The effects of ObamaCare

  2. MarkD Says:

    If those jobs are offshored, there are no American workers, and no penalties. How could every Republican not run against this and win?

    To quote Pogo, “We have met the enemy, and he is us.”

  3. Maggie's Farm Says:

    Tuesday morning links…

    Mammograms leading to unnecessary treatment, study finds Thinkin’ about “Lincoln” Stevie Wonder to perform for IDF After Silicon Valley, Tel Aviv Ranks Best for Tech Startups They Are Going To Make It Nearly Impossible To Pass On A Farm Or A Bu…

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