Employer mandates

The Washington Examiner is sorting through what it might mean if the Supreme Court enforces the letter of the ObamaCare law and disallows federal subsidies in states that refused to set up their own insurance exchanges.  Some consequences are fairly obvious, but this is one I hadn't thought about:
The (currently delayed) requirement for larger businesses to purchase insurance for their workers or pay penalties is triggered in cases in which at least one employee obtains government subsidies to purchase insurance. In states where subsidies cannot be distributed, the penalties won't apply. Therefore, a ruling against the government could set up a scenario in which businesses want to flock to states with federal exchanges as a way of getting around the employer mandate.

1 comment:

Elise said...

I had to read that 3 times - it's clearer to me if I make it say:

businesses want to flock to states without state exchanges as a way of getting around the employer mandate.

I hadn't thought specifically of the second-order effect of States without exchanges attracting businesses but it makes sense. It has always been my understanding that one reason a State would choose not to set up its own exchange was so it wouldn't trigger the subsidies and thus would shield companies in the State from from the "purchase or pay" aspect of ObamaCare. It figures companies outside such States would either like the same shielding or would be forced to seek that shielding in order to compete with those companies that are so shielded.