Stimulus Health Mandates Already Killing Jobs

Conn Carroll / June 22, 2009

All three Democrat health care plans (the House, Kennedy-Dodd, and Baucus bills) feature an employer mandate which will make it more expensive for employers to add employees. But as the New York Times reported last week, health care provisions in the stimulus are already making it harder for employers to hire new people:

As I understand it, there are two basic changes: First, employees who initially turned down Cobra have another chance to say yes (if they became eligible for it after Sept. 8). Second, business owners who have more than 20 employees and offer health insurance are now required to lay out 65 percent of any Cobra payments for employees who qualify for the benefits (this, too, applies to employees who took Cobra after Sept. 8). In addition, employers also must collect the 35 percent that employees still have to pay.

This represents a significant new burden to small businesses. Yes, the government will eventually reimburse employers for these Cobra payments through payroll tax credits. But that can take months. (more…)