The Sept. 19 opinion piece, “Reject plans for government care,” accurately notes some of the concerns that businesses have with the increasing number of employer mandates.
Policymakers who favor a requirement that employers provide health care for employees should also recognize the traditional definitions of “small business” versus “large company” aren’t always appropriate.
Many small employers have a very high profit per employee. For example, investment firms generate tens of thousands of dollars in pure profit for a single hire.
On the other hand, some large companies employ thousands of workers in entry-wage positions. They operate on low levels of profit per each employee.
A “play-or-pay” mandate based on number of employees disproportionately affects these businesses.
A $400-per-year-per-employee health-care premium would be less than 2 percent of the profit of a small investment firm but a devastating 20 percent of profits for a casual-dining restaurant.
Kristen Lopez Eastlick
Senior economic analyst
Employment Policies Institute