Thursday, June 27, 2013

Why Obamacare Could Eat Up Your Raise

Jonnelle Marte reports the latest evil developing out of Obamacare:
In an effort to meet the affordability requirement of the Affordable Care Act, which kicks in next year and requires that workers spend no more than 9.5% of their income on premiums, more employers are turning to insurance plans in which premiums vary based on a person’s salary, rather than having all workers pay a flat rate. That way, employees who make more money pay bigger premiums.
Some 12% of companies used salary-based premiums in 2012, up from 10% in 2011, according to a study by benefits consultant Mercer. The practice is especially common among large employers, with 20% of companies that have at least 5,000 employees using the strategy last year.

1 comment:

  1. This could create more compression on the middle class, more disincentive to work for a salary.

    On the other hand, assuming rational expectations will be adjusted for, the 9.5% rule creates more incentives for alternative arrangements such as independent contracting. It might be rational for some white-collar workers to quit employment, rehire as independent contractors, and just pay the ACA penalties for going uninsured or buy their own insurance.

    On that basis, the 9.5% rule might hurt non-unionized blue-collar workers the most, who don't have the option (or have fewer options) for going independent