Survey Majority of Employers Oppose Health Care Mandates, Curbing Tax-Free Benefits

Sixty-one percent of U.S. employers oppose curbing the tax-favored status of group health care coverage as part of health care reform legislation, according to a Mercer survey released Monday, July 6.

The New York-based consultant’s survey found that the majority of employers oppose capping the tax-free status of employer-paid premiums. Under current law, employer-paid premiums are excluded from employees’ taxable income.

Among employers that support a health care tax cap, just 8 percent said it should it be a high priority, while 18 percent said it should be a low priority and 13 percent ranked it as a medium priority.

Federal lawmakers, especially those on the Senate Finance Committee, are looking at the issue as a way to help produce some revenue needed to provide health insurance premium subsidies for a portion of the nation’s 46 million uninsured.

Employers also oppose the so-called “play-or-pay” concept in which employers are assessed a financial penalty if they that don’t provide coverage that meets certain standards.

Fifty-two percent of employers responding to the Mercer survey said play-or-pay should not be part of health care reform legislation, while 14 percent said it should be a high priority, 20 percent judged it a medium priority and 15 percent said it should be a low priority.

Washington observers say it is highly likely that an employer mandate will be part of health care reform legislation. In fact, the latest draft legislation by top Democrats on the Senate Health, Education, Labor and Pensions Committee calls for imposing an annual per employee assessment of $750 on employers with more than 25 employees that do not provide coverage to full-time employees and a $375 assessment on each part-time employee that does not receive coverage.

A soon-to-be unveiled proposal by the Senate Finance Committee also is expected to include a play-or-pay requirement.

The online survey—conducted June 17-26—is based on the responses of 329 employers.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.