Why Not Just Eliminate the Employer Mandate?

Under the Affordable Care Act, employers of 50 or more workers are subject to a penalty if at least one of their full-time workers obtains a marketplace subsidy. Employees offered coverage deemed affordable and adequate are prohibited from obtaining subsidies, as are their family members, and employers can avoid penalties by offering coverage to at least 95 percent of workers. The Administration has delayed the requirements until 2016 for employers of 50-99 employees, for larger employers until 2015, and softened requirements for that first year.

This brief finds that eliminating the employer mandate will not reduce insurance coverage significantly. In addition to having little effect on coverage, eliminating the employer mandate would eliminate labor market distortions in the law and lessen opposition to the law from employers.