Corporate
Benefit Cutters Still Shifting Costs to Taxpayers
By
Phil Mattera, Dirt Diggers Digest
Wal-Mart’s
recent announcement that
it will snatch health coverage away from 30,000 part-timers is not just the
latest in a long series of Scrooge-like actions by the giant retailer. It is
also a sharp reminder of both the necessity of the Affordable Care Act and the
deficiencies of that law.
If
we think back to the time before Obamacare became a political lightning rod, we
may recall that it was precisely the behavior of corporations such as Wal-Mart
that created the need for healthcare reform.
In
addition to paying low wages, Wal-Mart had long been criticized for providing
inadequate benefits to its employees. In 2003 the Wall Street Journal published
an article describing the various ways in which
the company kept its spending on health benefits as low as possible. This was
explored in more detail in an AFL-CIO study that came out about the same time.
Over
the following few years, state governments were encouraged to reveal which
employers accounted for the most enrollees (including dependents) in Medicaid,
the State Children’s Health Insurance Program and other forms of
taxpayer-funded health coverage. For those states that did disclose those
lists, Wal-Mart was almost always at or near the top. My colleagues and I at
Good Jobs First still maintain a compilation of these disclosures, though most of
the data is now woefully out of date.
Healthcare
reform should have put an end to all this, ideally by creating a system of Medicare
for all funded with higher taxes on business. Of course, what we got was
something else. Ironically, one of the most positive aspects of the Affordable
Care Act – the expansion of Medicaid eligibility in some states – may be increasingthe amount of hidden taxpayer costs
generated by employers such as Wal-Mart. Yet that’s less important that the
extension of those benefits to families desperately in need.
The
ACA’s impact on the large portion of the workforce not enrolled in public
programs is even more complicated. Although the law depends heavily on private
insurance, it does not, strictly speaking, require employers to provide group
coverage. Instead, what is often called the law’s employer mandate is a
half-baked arrangement that will simply require larger companies (50 or more
FTEs) that fail to provide adequate group coverage to pay a penalty.
That
penalty is likely to be less than the cost of providing coverage and it will
kick in only if at least one full-time employee
of a company ends up getting federally subsidized coverage through the state or
federal exchanges created by the ACA. It thus appears that companies such as
Wal-Mart, Target and Home Depot that dump part-timers from their plans will be
able to avoid the penalties, which in any event are not yet in effect as a
result of several postponements by the Obama Administration.
While
the ACA is helping more people get coverage, it does nothing to thwart low-road
employers from continuing to shift what should be their health coverage costs
onto taxpayers. It also appears to do nothing to help us discover which
corporations are guilty of this practice, since there are no explicit
provisions for making public the coverage reports that large employers will be required to
file with the IRS.
Not
only does the ACA fail to impose a meaningful employer mandate; it also misses
an opportunity to shame those freeloading employers which expect taxpayers to
pick up the tab for their failure to provide decent coverage to all their
workers.