Ezra Klein has his overview of the Max Tax here. After boasting of the plan’s affordability (!), Ezra’s biggest complaint is the lack of an employer mandate:
The employer mandate is pretty much the free rider plan that the Center for Budget and Policy Priorities tore apart here. It’s bad policy. An addendum though is that individuals whose employers offer them insurance are not eligible for subsidies, unless the insurance their employer offers would cost more than 13 percent of their income. I’d feel better about that if it were lower for low-income workers, but the plan says that the Secretary of Health and Human Services must revisit this number within five years to see if it should be lowered.
I’ll go further and say the Max Tax actually incents employers to offer shit plans. Here’s the whole section on what Bad Max euphemistically calls "Employer Responsibility:"
Employer Responsibility. Employers would not be required to offer health insurance coverage. However, employers with more than 50 full-time employees (30 hours and above) that do not offer health coverage must pay a fee for each employee who receives the tax credit for health insurance through an exchange. The assessment is based on the amount of the tax credit received by the employee(s), but would be capped at an amount equal to $400 multiplied by the total number of employees at the firm (regardless of how many receive a credit in the exchange). Employees participating in a welfare-to-work program, children in foster care and workers with a disability are exempted from this calculation.
As a general matter, if an employee is offered employer-provided health insurance coverage, the individual is ineligible for the tax credit for health insurance purchased through an exchange. An employee who is offered unaffordable coverage by their employer, however, can be eligible for the tax credit. Unaffordable is defined as 13% of the employee’s income. The employee would seek an affordability waiver from the exchange and would have to demonstrate family income and the premium of the lowest cost employer option offered to them. Employees would then present the waiver to the employer. The employer assessment would apply for any employee(s) receiving an affordability waiver. Within five years of implementation, the Secretary must conduct a study to determine if the definition of affordable could be lowered without significantly increasing costs or decreasing employer coverage.
A Medicaid-eligible individual can always choose to leave the employer’s coverage and enroll in Medicaid. In this circumstance, the employer is not required to pay a fee.
Coverage offered by an employer of any size, including fully insured and self insured plans, is not required to comply with the list of benefits required of plans in the non-group and small group markets. Employers must provide first dollar coverage for prevention services (except where value-based insurance design is used), however, and cannot have a maximum out-of-pocket limit greater than that provided by the standards established for Health Savings Accounts (HSAs).
First off, if a 50-person firm decided not to offer health care, it would have to pay up to $20,000. That’s a whole lot cheaper than the hundreds of thousands they would have to pay to insure these employees.
But let’s take a hypothetical employers–we’ll call them AlmartWay–that employs around 1.4 million people in the US.
AlmartWay pays such shitty wages that a huge proportion of their employees would actually be eligible for Medicaid, particularly with the eligibility for Medicaid boosted to 133% of poverty. So those employees could just enroll in Medicaid; AlmartWay wouldn’t pay a dime, and you and I would therefore be subsidizing the gutting of our local economy so that the descendants of Sam AlmartWay could continue to get disgustingly rich.
But say that only covers about 500,000 of AlmartWay’s employees. That would leave 900,000 employees. Enough that AlmartWay might want to offer health care to avoid the 350 million dollar fine it might get. So AlmartWay offers a plan that has a huge deductible and pays 60% of costs that employees have to buy into. According to Bad Max’s plan, after all, employer health care plans don’t have to meet any of the standards that single enrollee plans have to meet, save for making preventative care available.
Coverage offered by an employer of any size, including fully insured and self insured plans, is not required to comply with the list of benefits required of plans in the non-group and small group markets. Employers must provide first dollar coverage for prevention services (except where value-based insurance design is used), however, and cannot have a maximum out-of-pocket limit greater than that provided by the standards established for Health Savings Accounts (HSAs).
Because of AlmartWay’s size, everyone would be automatically enrolled.
Employers with 200 or more employees must automatically enroll employees into health insurance plans offered by the employer. Employees may opt out of employer coverage, however, if they are able to demonstrate that they have coverage from another source. Additionally, states would have the option of establishing a process for auto-enrollment of individuals and families into policies offered in the non-group and small group markets
Which means AlmartWay’s employees can only get out of paying for such crap is if they can prove that they’re enrolled in something else. But unless AlmartWay’s insurance cost more than 13% of their employees’ salary, then that employee couldn’t get a subsidy they’d otherwise qualify for.
As a general matter, if an employee is offered employer-provided health insurance coverage, the individual is ineligible for the tax credit for health insurance purchased through an exchange. An employee who is offered unaffordable coverage by their employer, however, can be eligible for the tax credit. Unaffordable is defined as 13% of the employee’s income.
Hell, if I were a rapacious manager like AlmartWay’s completely hypothetical managers were, I’d turn employee health care into a profit center because (if I read this right) you could require employees to pay back 12.9% of their income for health care, and the only thing you’d really have to promise in return is preventative care. So I predict, if this bill passes in anywhere near this form, that AlmartWay will start making its own employee health care a big profit center because they will be stuck.
By golly. This is even a health care plan Blanche Lincoln and Mark Pryor and their biggest constituent could love!! Though frankly, Bad Max’s plan is even worse than Wal-Mart itself–with a call for part time mandates and no disability discrimination–called for (though maybe Wal-Mart was thinking of the free subsidy for its Medicaid eligible employees all along).