Employers Have Options For Escaping Some Obamacare Costs
Staying small and using temps, among them
The economic literature on this type of mandate is clear. Although government can offer people something for nothing, the labor market does not. Employee benefits are not gifts from employers. They are substitutes for money wages and other benefits. The cost of the employer mandate will surely be borne by the employees themselves.
We can be fairly certain that low-wage workers and their employers will be searching for ways to avoid the mandate. Why? If the employees were willing to spend half their income on health insurance they would have done so already. That they have not indicates they would rather spend the money on something else.
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“Employers can drop health insurance coverage altogether (or never provide it in the first place) and pay a fine equal to $2,000 per employee.”
So we move $2K per employee from labor costs into just plain additional taxation.
Now, that’ll stimulate employment right there!