Spectra Newsroom

It’s one of the touchiest issues in the healthcare debate: would a public healthcare option decimate the employer-based health insurance system now used by more than 160 million Americans, of whom some 80 percent are claiming satisfaction?

Democrats who support the controversial legislation say no and adhere to the position it will actually create more competition, lower costs, and foster quality care. Others disagree.

Opponents believe the 1,900-page healthcare reform bill loaded with government mandates and a public option, light restrictions on state-centric insurance monopolies, and weak attempts at tort reform would ultimately put private insurers out of business, subsequently forcing Americans into a public-option that offers less choice, more control and restriction, and higher costs for taxpayers.

According to a recent CNNMoney.com story, the “pay or play” requirement currently still a part of the ever-growing healthcare reform bill would require businesses to pay the government $750 per full-time worker per year ($375 for part-timers) if they don't offer health coverage, or if they offer “qualified” coverage but pay less than 60 percent of workers’ premiums. Small businesses that employ fewer than 25 workers would be exempt. The “pay or play” mandate is also geared toward individual Americans who can choose not to purchase insurance and is expected to be carried out in the form of an annual excise tax.

A key component for business, and specifically Spectra Management clients, is not just if the employer offers benefits but the mandate that 60 percent or more must be paid toward the cost of benefits by the employer and the implications this mandate could have on future businesses hiring and being forced to lay off employees.

Whether for or against healthcare reform, the “pay or play” requirement comes down to whether you believe government has a say in how business owners run their businesses.

Many in the business community contend the “pay or play” mandate would make it harder for employers to maintain a payroll with decent wages as well as the required benefits. James Gelfand, senior manager of health policy for the U.S. Chamber of Commerce, contends that the free market offers the best mechanism for sustaining employer-based insurance. According to Gelfand, “Market forces say if you want the best employees, you offer the best insurance you can.”

A recent study by the National Federation of Independent Business Research Foundationconcluded that an employer mandate could eliminate 1.6 million jobs over the course of five years and reduce GDP by around $200 billion.

Moreover, CBSNews.com reporter Stephanie Condon also concluded that opposing reports make it clear that the success or failure of an employer mandate will depend on both how the employer mandate would be set up and how the rest of the healthcare reform package is structured.

R. Brent Bennettof Spectra Managementis a Registered Representative of and offers securities products and advisory services through Royal Alliance Associates, Inc. Member FINRA/SIPC,
a registered broker-dealer. Spectra Management is not affiliated with Royal Alliance Associates, Inc. This information is not intended to be a substitute for specific individualized tax or legal advice. Please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.

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