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"Employer Investments in Health Care Reform" by Michael Widmer

One of the key features of the health reform law is that it represents a true partnership among government, employers, and individuals. While the discussion of employer responsibility has centered on the "fair share" assessment, a much more critical element has been largely ignored - namely, under health reform there will be a major increase in employer-funded insurance to cover those employees who previously declined employer-offered
coverage but will now accept it because of the individual mandate.

An estimated 100,000 of the state's uninsured are working for employers who provide health insurance; the majority of these individuals will take that coverage for the first time under health reform. This will produce a major infusion of additional employer dollars into the health care system - a minimum of $200 million and probably much more. This is several orders of magnitude larger than the estimated $31 million to be raised by the fair
share assessment.

Of course, employers have other major responsibilities as well, such as the obligation to establish a so-called Section 125 plan so employees can purchase health insurance with pretax dollars, and the requirement for many employers to upgrade their health plans to meet the standards of minimum creditable coverage.

The health reform law was built on a strong system of employer-based coverage in Massachusetts, and additional employer responsibilities and dollars will be critical to the reform's success.

Michael J. Widmer is President of the Massachusetts Taxpayers Foundation

This program aired on April 20, 2007. The audio for this program is not available.

Martha Bebinger Twitter Reporter
Martha Bebinger covers health care and other general assignments for WBUR.

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