Oh Dave

I just listened to Dave Ramsey's response to the health care ruling. It turned out to not be a response at all but rather a rail against the Employer Shared Responsibility portion. Let me first say I think that I think that employer based health insurance is a silly relic. I completely agree that the burden of providing healthcare should not be on employers. I just don't think that hyperbole is getting us anywhere useful.

Dave Ramsey gave the example of a struggling restaurant with 60 employees that will be out at least $50,000 extra because of PPACA or 1000 a month per employee if they decide to provide insurance. So let's read the law with my bolds.

Generally, a large employer will be subject to an assessable payment if any full-time employee is certified to receive a premium assistance tax credit and either the employer does not offer full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an employer plan (Code Sec. 4980H(a)) or the employer offers full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage that either is unaffordable or does not provide minimum value (Code Sec. 4980H(b)). The shared responsibility payment requirement is scheduled to be effective after 201

The PPACA describes how to calculate the shared responsibility payment. The annual assessable payment under Code Sec. 4980H(a) is based on all (excluding the first 30) full-time employees. The annual assessable payment under Code Sec. 4980H(b) is based on the number of full-time employees who are certified to receive an advance payment of an applicable premium tax credit.

The shared responsibility payment requirement applies to “large” employers. The PPACA describes a large employer as generally an employer that employed an average of at least 50 full-time employees on business days during the preceding calendar year. The PPACA includes special rules for employers that employ seasonal workers. The PPACA exempts small firms that have fewer than 50 full-time employees.

So first, the employees must be full time employees, this is less and less likely a restaurant, and honestly, less and less likely a place that doesn't already provide some kind of health insurance plan anyway. In fact a restaurant would likely be helped by the law because of the provision for 25 and under full time employees. Secondly, the employer would be cost sharing a new insurance plan with the employees, not providing the entire cost. They might even be able to charge the full cost to many of their employees (the problem being "affordable" is as yet undefined).

Thirdly, his penalty math is worse than double the worst case. I have a worst case of 750 * (60-30) per year, or  22500 for 60 full time employees that are "certified to receive a premium assistance tax credit" . It is also unlikely that a business, as Dave puts it, that is "hanging by a thread" would not be able to appeal the penalty or get a waiver. Indeed, a bigger issue here is that most of the regulations have yet to be written. One thing I'm quite sure of though is that businesses exposed to the worst case scenario (which Dave more than doubled) will be few and far between. As much as Dave wants to paint Democrats as happy job killers, most would see the logic and want to reduce the burden. These yet unwritten rules are there precisely because painting all employers with the same broad brush would be crazy.

Nevertheless it's still bad policy. Employer based healthcare is onerous and unnecessary, and this portion of the law introduces a lot of uncertainty to business owners. If only we had a party interested in fixing government instead of insisting it can't be fixed and putting their heads in the sand when it comes to society's problems.

The biggest problem I have is that Republicans like Dave had ample opportunity to see the inevitability of universal health care passing and didn't get rid of employer based health coverage in return for some votes. This kind of "scorched earth" governing is not helpful and neither is this rant.