In today's Wall Street Journal, Janet Adamy notes that large employers (those with 50 or more employees) are worried about the health care overhaul's employer mandate. Regulators, meanwhile, are having trouble figuring out exactly how to enforce it. One problem she notes: the law requires employers to adhere to a standard for health insurance affordability that's based on family income:
Moreover, companies are worried about another standard that requires they offer care that is "affordable," or roughly 9.5% of an employee's household income. The employers say they can't calculate that without asking employees how much their spouses or dependents earn—a potential privacy violation that may not be verifiable, either.
So employers may be put in a situtation in which they either forced to either violate the law or intrude into the family finances of their employees. At minimum, this provision has the potential to seriously alter how Americans conduct salary and compensation negotiations: Who wants to pay Sally more when her husband brings in a million bucks a year on Wall Street? Why give Mike a raise this year when his wife just made partner at her law firm, and brought in a giant bonus? Even if employers make it explicit policy to avoid making compensation decisions on such factors, the knowledge that one employee's spouse makes a ton of money is almost sure to have a subtle effect.
As I noted last summer, the law's government-run health insurance exchanges, which dole out subsidies based on family income, may have similar verification issues.