Via Heritage, the New York Times finds that provisions in the stimulus bill are preventing businesses from hiring:
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.
Let’s think about what’s happening here. There is an assumption that an employee who is laid off is going to need help making those Cobra payments, and that may well be the case. But what about the employer? If a company is laying off people, there’s a pretty good chance it’s losing money. Possibly a lot of money. In some cases, it may be fighting desperately just to stay in business.
So here’s my question: Why do we automatically assume that these companies are in a position to be fronting money for anyone. Why are they automatically in a better position than the insurance company, the employee, or the employee’s relatives?
Mandating that businesses provide health care coverage will guarantee that businesses choose not to hire because of the additional costs of health care coverage.
