This is excerpted from an essay that won the first place prize for a research paper in the 100s Essay Contest. It’s companion piece can be found here.
State or federal governments must make it affordable and rewarding for employers to provide financial aid for their employees, while ensuring that employees can afford the costs of health-care. Requiring that employers provide benefits proportionally according to a part-time worker’s weekly working hours would relieve at least some of the burden of costly health insurance. Employers would calculate the percentage of a full-time schedule worked by a part-time employee, and would then pay that same percentage of the employee’s premiums. If employers were required by law to provide benefits proportionally, part-time employees would have access to at least some form of health care.
The current legislation would only have to be slightly extended in order to cover such a policy. Under the Affordable Care Act, employers are only fined if they don’t “offer insurance that covers at least 60% of the actuarial value of the cost of benefits” to full-time workers.[i] The Affordable Care Act could be extended to cover employer provision of benefits for part-time workers, so that an employee working 15 hours a week (half a full-time, 30 hour job) would get half the cost of their insurance covered by their employer.
To provide an incentive for businesses to provide care, and simultaneously help them out with the cost, state (or even federal) governments could provide tax credits to those companies who participate. This credit system could be modeled after the provision of the Affordable Care Act, in which, after 2014, small businesses with “fewer than 25 FTE employees may be eligible for tax credits to assist in the cost of health insurance” worth up to 50% of what an employer contributes to employees’ premiums if they purchase the insurance through SHOP Exchanges (exchanges that are a part of the Small Business Health Options Program, an insurance exchange or market created by the Affordable Care Act for small businesses).[ii] These 50% tax credits would make up for what employers pay in insurance premiums for their workers, because employers would be exempt from the dollar amount of taxes equal to up to half of what they paid to help employees afford insurance premiums.
Tax credits will also allow employers “to purchase insurance on their own through the exchange” for their employees,[iii] so that companies will no longer have to worry about the “high cost of providing care” which, in 2012, deterred businesses from covering their workers.[iv] Furthermore, if companies get tax credits for covering their employees’ insurance costs, they will be motivated to cover even more than the mere 30% of health costs (partial financial aid provided by employers for part-time employees based on the ratio of hours worked part-time to hours worked by a full-time employee) of a 15-hour part-time employee, because paying more of their costs would yield even more tax credits.
Once part-time workers take advantage of government subsidies and financial aid from their employers, they will be able to go to these state- and federally-run exchanges and find a health care plan that will suit their needs. The Affordable Care Act provides for the creation of “state-based” insurance exchanges, which are “structured web-based” marketplaces for health care packages.[v] Each exchange will “rate plans according to quality and cost… and present health plan characteristics in an easily comparable format”.[vi] Depending on whether states choose to run their own exchanges or let the government run the state’s exchanges, either state or federal governments would “actively [screen] the policies and [negotiate] with insurers on behalf of customers”[vii], ensuring that each costumer finds the plan best suited to their needs, at an affordable price.
Although specific provisions of exchanges will be decided in each state, nation-wide consumers will have to choose between plans in “four tiers”[viii]–bronze, silver, gold and platinum— available in the insurance exchanges, which will cover “an average” of 60%, 70%, 80%, and 90%, respectively, of “an individual’s total medical costs in a year”.[ix] All of these plans will include an “essential benefit package” which will have to cover necessary services including “emergency services; hospitalization; maternity and newborn care; …prescription drugs;…preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care”.[x]
Some companies are already sending their full-time employees to insurance exchanges with financial aid from the company. Starting in 2013, Darden Restaurants plans to “give [full-time] workers a contribution toward buying coverage and then send them off to an online health insurance exchange where they can choose from five medical, four dental and three vision plans”.[xi] Companies need to provide this same type of contribution to part-time workers based on the part-time/full-time hours-worked ratio I proposed, so that individuals could then find the best plan for them. Tax credits would give employers the incentive to pay for at least part of employees’ health insurance costs.
For this solution to work, every American will have to have some sort of health insurance, whether provided through their employer, by Medicaid, or bought individually in insurance exchanges with the help of employers’ funds. This system would ultimately save the thousands of dollars that Americans pay to cover the uninsured, while providing care for millions Americans including part-time workers.
Sound health is an inherent human right. To maintain a health and functioning society, every person must have access to affordable health care. State and local governments must decide whether they want their citizens to keep paying for uninsured Americans, or whether they want to enforce a change, and encourage employers to help part-time workers afford health care.
[i] “Focus on Health Reform” 3.
[ii] “Focus on Health Reform” 2-3; Ibid.
[iii] “Focus on Health Reform” 3.
[iv] Claxton, “Employer Health Benefits 2012 Annual Survey” 2.
[v] Allison, “Health Insurance Exchanges: States’ Role in Health Care Reform” 1.
[vi] Allison, “Health Insurance Exchanges” 1.
[vii] Abelson, “Health Exchanges: Will They Work?” par. 12.
[viii] Allison, “Health Insurance Exchanges” 1.
[ix] Collins, “Realizing Health Reform’s Potential” 13.
[x] “Essential Health Benefits” par. 2, Healthcare.gov.
[xi] Jamieson and Young, “Under Health Care Reform, Employers May Slash Workers’ Hours To Avoid Mandate” par. 14.
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