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NBCH Coalitions Explore Alternatives to "Play or Pay" Mandate
Due to the precedent set by the Maryland effort, approximately 21 other states developed legislation requiring employers to spend a designated percentage of payroll on employee health care or pay into a state fund for the uninsured. Most likely the recent court ruling will thwart similar bills under consideration in other states and municipalities. However, there are other variations of the employer mandate that could stand up to court review. For example, Massachusetts's well-publicized new individual health care coverage mandate, signed into law on April 12, requires uninsured residents of Massachusetts to obtain health coverage. However, this new law, despite the Governor's veto, also mandates employers with 11 or more full-time workers to pay $295 per year for each worker without health insurance coverage.
Regrettably, there is not a united employer viewpoint on this "play or pay" approach. Some employers and union plans believe that large employers should pay their share of health insurance costs, rather than leaving the employers providing insurance to absorb the impact. In contrast, many other employers and business coalitions believe there are fundamental flaws with this approach to "mandating" health care benefits. Both sides have compelling arguments to support their views.
Proponents believe that mandating coverage based on specific criteria is better than the complacent status quo. They believe that none of the current access and health care reform proposals addresses the total uninsured population. In addition to providing access to more health care than currently exists, proponents believe this strategy "levels the playing field" by giving some relief to states now absorbing the lop-sided burden and reducing cost-shifting to those employers that are investing in health care benefits.
Opponents contend that the array of "fair share health care" bills cannot solve the far-reaching problem of nearly 46 million uninsured Americans since most uninsured are unemployed, employed part-time, work for companies with fewer than 10 employees, or are newly employed and awaiting eligibility. Opponents also are concerned that mandates would penalize the efforts of some employers who utilize good cost and care management, thereby keeping their health care costs below the required percentage of payroll threshold. Finally, opponents are concerned that mandated health care coverage legislation negatively impacts jobs and job creation since employers may shift jobs outside of the state to other areas where they can be more competitive with their health care health care benefits.
NBCH believes government and business partnerships that employ a combination of the following policy incentives may do a better job of increasing employee health insurance coverage instead of a legislated mandate: