Eliminate the Employer Mandate – Says the Urban Institute

Jamie Scott

The Urban Institute is generally viewed as a center-left policy research institute that has been supportive of the Affordable Care Act. That is why it is so surprising that it just published a brief suggesting the elimination of the employer mandate, along with its substantial penalties for failing to offer employees affordable and adequate health coverage.

The brief explains that using employer penalties as a source for financing health care reform harms low-wage employees.  Such harm may be in the form of reduced hours, restricted employee counts, and reduced compensation from employers passing on the cost of the penalties. Also, as we pointed out here, an employer that offers affordable health coverage to a low-paid worker in order to avoid the penalties disqualifies the worker for subsidies that would otherwise be available from the exchange.

While the brief indicates that elimination of the employer mandate would not significantly reduce insurance coverage, other sources of revenue would need to be found to replace the penalties. This report is sure to generate plenty of interest form supporters and detractors of Health Care Reform.