On Eve of Law’s 3rd Anniversary, Committee Releases Report on "Obamacare vs. Jobs"
WASHINGTON, DC – On the eve of the health care law’s third anniversary, the House Energy and Commerce Committee today released a staff report entitled “Obamacare vs. Jobs.” The report includes information on how the law’s mandates, regulations, and cost increases are impacting job creation and the security of employer-provided health insurance coverage.
During the health care debate, then-Speaker Nancy Pelosi claimed, “this bill is not only about the health security of America. It’s about jobs. In its life, it will create four million jobs, 400,000 jobs almost immediately…” However, the Current Economic Conditions report recently published by the Federal Reserve states that employers are citing the health care law “as reasons for planned layoffs and reluctance to hire more staff.”
Obamacare’s Impact on Innovation, Full-Time Job Opportunities, and Compensation
- New Taxes Harming Job Creation and Innovation, Leading to Layoffs. The law includes $1.1 trillion in new taxes, including new levies on health insurance, drugs, and medical devices, as well as new limitations on health savings and flexible spending accounts. As one example, the new tax on medical devices will have a ripple effect that extends beyond patients, also imposing burdens on innovators who create well-paying jobs.
- Obamacare’s Part-Time Jobs Boom, Full-Time Jobs Bust. The law stipulates that all businesses with 50 or more full-time employees must provide government-approved employer-sponsored health insurance or face a $2,000 fine for every employee beyond the 30th, creating a perverse incentive to stop hiring when they reach 49 employees. The law also redefines full time employees as anyone working 30 hours/week, which is causing employers to limit hours for part-time workers to avoid reaching the 30 hour rule.
- Overall Employee Compensation Reduced. Several surveys of large corporations reveal that employers will find it advantageous to drop employer-sponsored health insurance (ESI) in favor of having their employees purchase coverage on the exchanges. While many employers that drop ESI are likely to offer some offsetting wage increase, the fully taxed additional wages are likely to remain less valuable to workers than the tax-advantaged health insurance.
- Obamacare’s Negative Spiral Effect. Through unemployment or conversion to part-time work, the income of the lowest wage earners will be driven further down. These individuals and families will be enrolled in the overstretched Medicaid system, which should be reserved for the nation’s most vulnerable populations.
Read “Obamacare vs. Jobs” online HERE.