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Buying Group Health Insurance Can Be a Bureaucratic Nightmare

If the Republican Party really wanted to win in 2012, they would raise this issue.

by
Clayton E. Cramer

Bio

October 27, 2011 - 12:00 am
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I have been digging through the government bureaucracy, trying to find out the exact language that prohibits an employer offering an employee-paid group health insurance plan. I can find references to this requirement, but the law itself seems to be pretty well hidden in the bureaucratic rule-making system.

I am quite sure that it is not a result of Obamacare. When my son was working his way through college at a pizza joint, the owner expressed his desire to provide health insurance for his employees, but he ran into the same problem: he was required by law to pay at least half the costs of health insurance, or not offer it at all.  Since the employees were paid just a bit better than minimum wage, and the owner was not doing dramatically better himself, there was no way that the owner could afford to offer group health insurance without reducing his workers’ pay below minimum wage, which would be illegal.

I do not know when this absurd rule first went into effect, but it means that any employer who hires low-wage workers by law cannot offer group health insurance.  There is no question that even if an employer could offer it as an employee-paid plan, many low-wage workers could not afford it.  This would be unfortunate.  But the current interference in the free market is worse: even those low-wage workers who can afford group health insurance may not purchase it.

If the Republican Party really wanted to win in 2012, they would raise this issue as an example of an absurd regulation that does not simply discourage group health insurance for the poorest workers, but utterly bans it.  I would love to see the Democrats try to justify it.

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Clayton E. Cramer teaches history at the College of Western Idaho. His most recent book is My Brother Ron: A Personal and Social History of the Deinstitutionalization of the Mentally Ill (2012). He is raising capital for a feature film about the Oberlin Rescue of 1858.
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