We’ve reported before on recent analysis by the Lewin Group, the nation’s most prominent health policy econometrics firm, showing that full implementation of the House health legislation would force 83.4 million Americans out of their current plan and into government-run health care. Now Sageworks, a data analysis firm focused on small business, has also released a study of the bill. Investor’s Business Daily reports:
The House version would require any employer with a payroll of at least $500,000 a year to provide health insurance or pay a penalty.
The penalty would start at 2% of payroll and increase with payroll size. The maximum penalty would be 8% of payroll for firms whose annual outlay for wages and salaries is $750,000 or more.
Experts say even that maximum penalty of 8% of payroll could be such a good deal for employers that they’d rather pay it than buy health insurance for their workers. That would put those workers into a government-run plan.
But don’t think for a second that these small businesses will be able to create new jobs after dumping their employees into the public plan. IBD continues:
If the payroll exceeds $500,000, paying the penalty will be a new, added cost of doing business. Small businesses spend 60 cents to 80 cents of every revenue dollar on salaries, Hamilton says.
The uninsured penalty will add up to 8% of the payroll cost. That could dampen new hiring.
Even if a company wants to add workers because its business is growing, it might not be worth it if doing so pushes the payroll to the next level, where a higher health benefit penalty would apply.