Saturday, August 8, 2009

In Which Zandar Answers Your Burning Questions

Ezra Klein asks "Is This Health-Care Reform's Worst Idea Yet?"
The Senate Finance Committee does not want to propose an employer mandate to promote health-care coverage. But it doesn't want to let employers entirely off the hook, either. So it has come up with one of the worst ideas in recent memory: A so-called "free rider" tax. Under the proposal, employers with more than 50 workers would have to pay the subsidy costs for low-income workers who seek coverage in the Health Insurance Exchanges. But they wouldn't have to pay a dime for higher-income workers who did the same.

You can pretty much see where this is going: workers from low-income families become more expensive than workers from high-income families. As the Center for Budget and Policy Priorities explains, "Employers would have strong incentives to tilt hiring toward people who have a spouse with a good income (or have health coverage through a family member), teenagers whose parents make a decent living, and people without children (since the eligibility limit for the subsidies in the new health insurance exchanges will increase with family size). Low-income women with children in one-earner families would be particularly disadvantaged."

I'd have to agree with Ezra.

Not only would large companies have strong incentives to hire single people with no children to avoid having to pay subsidies, I would think that companies would start having to legally have HR policies in place to have hiring managers ask questions like this before hiring someone as a matter of legal policy, particularly publicly traded companies.

You could then make the very strong case that if a large corporation did not have such a hiring policy in place saying if two candidates are otherwise equal, the job must go to the person that would incur the least amount of subsidies under this law, the company shareholders could conceivably file a class-action suit saying the corporation should in fact do that, else they would be negligent in their duties to shareholders.

Needless to say, the profit motive alone would be enough to motivate corporations to do this, not to mention motivate smaller businesses to keep staffs at no more than exactly 49 people to avoid the problem altogether.

Also, if you have to slash headcount in the department you manage and your employees include a single mother with 4 kids, under that provision whose position would you eliminate first? I can think of all kinds of situations where this would become a serious problem.

Having to miss work to take a child to a doctor's appointment in the morning would become a termination offense, especially in right-to-work states where companies can fire workers for any reason and there's no unions.

The more children you have, the less desirable you are as an employee. They would in fact become liabilities to job seekers. What a great country that would be.

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