Employer Mandate

 VII. Key Issues: Regulation & Reform >> C. Health Reform >> Components of Health Reform >> Employer Mandate



  • See Employer Mandates under Health Insurance Regulation
  • Employer Mandate (search in Health Affairs)
  • Employer Mandate (National Center for Policy Analysis)
  • Krueger, A. B., and U. E. Reinhardt, The Economics of Employer Versus Individual Mandates, Health Affairs, Vol. 13, No. 2, 1994, pp. 34–53.
  • Baicker, K., & Levy, H. (2008). Employer Health Insurance Mandates and the Risk of Unemployment. Risk Management and Insurance Review, 11(1), 109-132. Employer health insurance mandates form the basis of many health care reform proposals. Proponents make the case that they will increase insurance, while opponents raise the concern that low-wage workers will see offsetting reductions in their wages and that in the presence of minimum wage laws some of the lowest wage workers will become unemployed. We construct an estimate of the number of workers whose wages are so close to the minimum wage that they cannot be lowered to absorb the cost of health insurance, using detailed data on wages, health insurance, and demographics from the Current Population Survey (CPS). We find that 33 percent of uninsured workers earn within $3 of the minimum wage, putting them at risk of unemployment if their employers were required to offer insurance. Assuming an elasticity of employment with respect to minimum wage increase of -0.10, we estimate that 0.2 percent of all full-time workers and 1.4 percent of uninsured full-time workers would lose their jobs because of a health insurance mandate. Workers who would lose their jobs are disproportionately likely to be high school dropouts, minority, and female. This risk of unemployment should be a crucial component in the evaluation of both the effectiveness and distributional implications of these policies relative to alternatives such as tax credits, Medicaid expansions, and individual mandates, and their broader effects on the well-being of low-wage workers.
  • Caplan, BryanMandated Benefits and Wage Rigidity: The Effects of the “Fair Share Health Care Fund Act.”  January 13, 2006. Maryland’s “Fair Share Health Care Fund Act“, effectively forces Wal-Mart to spend at least 8% of its payroll on health care. This analysis shows how the policy likely would result in a labor surplus in the short-run that would be eliminated in the long run by letting wages rise more slowly than inflation.  Maryland became the first state to successfully enact a Fair Share for Health Care bill when the state’s legislature overrode the governor’s veto, January 12, 2006.
  • Doucouliagos, H. and Stanley, T. D. (2009), Publication Selection Bias in Minimum-Wage Research? A Meta-Regression Analysis. British Journal of Industrial Relations, 47: 406–428. Meta-analysisy of 64 minimum wage studies published between 1972 and 2007.
  • Schmitt, JohnWhy Does the Minimum Wage Have No Discernible Effect on Employment? Center for Economic and Policy Research, February 2013.  This report examines the most recent wave of research – roughly since 2000 – to determine the best current estimates of the impact of increases in the minimum wage on the employment prospects of low-wage workers. The weight of that evidence points to little or no employment response to modest increases in the minimum wage. The report reviews evidence on eleven possible adjustments to minimum-wage increases that may help to explain why the measured employment effects are so consistently small. The strongest evidence suggests that the most important channels of adjustment are: reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners (“wage compression”); and small price increases. Given the relatively small cost to employers of modest increases in the minimum wage, these adjustment mechanisms appear to be more than sufficient to avoid employment losses, even for employers with a large share of low-wage workers.


Minimum Wage Laws


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