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Businesses that Shift the Cost of Health Care onto the State Need to Pay-up

Posted by Kim Justice at Feb 03, 2014 09:00 PM |
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With over 300,000 Washingtonians already signed up for health coverage either through private health plans or Medicaid, Washington state is successfully delivering on its responsibility to greatly expand coverage through the Affordable Care Act (ACA). Washington state employers must also do their part. House Bill 2588 would prevent big companies from shifting the costs to the state when they skirt their responsibility to provide health coverage to their workers.

Under the ACA, employers with 50 of more employees must make affordable coverage available to their full time workers or face a penalty for each worker who accesses subsidized coverage in the Exchange.(1)  But there is currently no penalty applied if part-time employees receive coverage through the Exchange, and nothing exists to discourage employers from exploiting public health programs by shifting low-wage workers onto Medicaid at no cost to their business. That means that employers who reduce wages, cut hours, and fail to provide benefits are able to dodge the federal penalties and shift the cost of health care for low wage workers onto taxpayers. 

House Bill 2588 would strengthen the existing employer responsibility requirement in the ACA by requiring large employers (with at least 500 employees) to pay a penalty for each worker who is enrolled in Medicaid. The penalty payments, which would go back into the health care system to cover state costs for Medicaid, would prevent large profitable corporations from sticking Washingtonians with the tab for their workers’ health care. 

There is already ample evidence that many big businesses punt the responsibility of their workers’ health care onto the state. A recent report by the Washington State Health Care Authority found that in 2012, over 90,000 individuals who received public health coverage were employed, costing the state approximately $660 million. Under the expansion of Medicaid, many more Washingtonians are gaining access to coverage, allowing employers to shift even more of the costs. 

A central tenet of the Affordable Care Act is shared responsibility. Under the law, individuals are required to have coverage; state and federal governments chip-in to help make health care accessible to those who couldn't otherwise afford it; and employers must do their part by providing coverage or contributing to the cost. HB 2588 would safeguard the success of health reform by holding big businesses accountable and ensuring they do not skirt their responsibility.


 1. An employee is considered full time if they work a monthly average of at least 30 hours a week or 130 hours a month




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