Employer Mandates
VII. Key Issues: Regulation & Reform >> B. Health Care Regulation >> Health Insurance Regulation >> Employer Mandates
Overview
Employer-Mandated Health Insurance
Three quarters of the uninsured are either workers or dependents of workers. An employer mandate provides a convenient way to cover large numbers of uninsured while at the same time minimizing the cost to state government. If employees value the benefit, mandated benefits can be more efficient than direct subsidies since the latter have deadweight losses from taxation; if employees fully value the benefit, wages would fall to completely offset the cost to the employer, in which case there is no efficiency loss (Gruber 1992). The Duke Center for Health Policy has developed a draft working paper assessing the costs and benefits of employer mandates for health insurance (pdf).
Mandatory Paid Sick Leave
Federal Requirements. Federal labor laws don’t require paid sick leave, though the Family and Medical Leave Act provides up to 12 weeks of unpaid leave without risking loss of the job.
State Requirements. To date, Connecticut is the only state that requires private-sector employers to provide sick pay, under a law that went into effect in January 2012. Under the law, 400,000 of the state’s 1.7 million workers at businesses with more than 50 employees receive one hour of paid sick leave for every 40 hours of work, up to five days a year. Manufacturers and temporary workers are exempt. Only 10% of these employers said the law had increased payroll costs by more than 3%, the survey found. Conversely, some states, including Wisconsin and Florida, have banned cities from adopting sick-pay legislation, citing a negative impact on the local economy.
Local Requirements. Many cities and states across the country have been adopting strict new mandates outlining paid sick days. In recent years, New York City, San Francisco, Jersey City, Portland, Ore. and Washington, D.C., have enacted measures. The laws generally require businesses with at least five employees to provide a number of paid sick days, based on the total hours worked, up to a specified maximum, typically five to seven days a year.
- About 86% of U.S. companies of all sizes last year provided some form of paid sick leave, through stand-alone or broader paid-time off plans, according to the Society for Human Resource Management.
- But roughly 40 million U.S. workers, or about 38% of the labor force, currently don’t have paid sick leave, according to the left-leaning think tank Center for American Progress.
- Center for American Progress estimates that sick workers—whether staying at home or working at less than full throttle—cost employers more than $160 billion a year in lost productivity.