ACA mandate penalty exceeds coverage costs, Florida finds

Critics argued that businesses may opt to pay lower-cost penalties

The cost of providing health insurance to state employees in Florida under employer mandate in the Affordable Care Act (ACA) would be significantly lower than paying the penalties for not offering coverage, according to state officials.

Under the ACA, businesses with at least 50 workers beginning in 2014 must provide access to affordable health coverage to employees who log at least 30 hours per week, or pay a penalty of $2,000 per employee. Some critics of the provision have argued that businesses will opt to pay the lower-cost penalty and stop offering coverage.

However, Barbara Crosier, director of the Florida Division of State Group Insurance, said paying the penalty for uninsured workers would cost the state about $300 million in the next fiscal year, compared with the $23.5 million it would cost to offer coverage. She noted that over the next three years the cost of providing coverage would rise to $50 million.

Crosier said she did not know why Florida's estimates were so far out of line with estimates for private companies. Her office estimated that under the law "as written," health care costs would continue to rise at about the same levels as they have over the past few years.

Crosier noted that the state has about 6,000 workers who are not able to obtain coverage through their state jobs (Baker, "Healthwatch," The Hill, 1/18).

Next in the Daily Briefing

Obama pledges to make 'hard choices' on health care

Read now