Employer Health Insurance Mandates: House vs. Senate

The two big health bills in the news at the moment — the one introduced in the House yesterday, and the one approved by the Senate HELP committee today — would both extend health insurance to millions more people. Both would also require that all but the smallest employers either offer health insurance to their workers, or pay a penalty.

But there are some key differences between the penalties that would be imposed by the two bills.

The mandate in the Senate bill, which applies to businesses with more than 25 employees, requires companies to pay a penalty of $750 per full-time employee.

Under the House bill, employers with payrolls of more than $400,000 a year would have to provide health insurance or pay an 8% penalty. Companies with payrolls between $250,000 and $400,000 would pay lower penalties; smaller companies wouldn’t be subject to the mandate.

So if we do a quick, back-of-the-envelope calculation, we can imagine a 50-person company paying each employee $50,000 for a total payroll of $2.5 million a year. That company’s penalty under the House bill for not offering insurance would be $200,000, or $4,000 per employee.

The Senate bill’s $750-per-employee penalty, by contrast, would add up to $37,500.


(Source: Wall Street Journal, Link: http://bit.ly/12SxyX)