outsourced socialism
The Federal government has seen fit to demand that business owners provide medical coverage for people who are not their employees, under certain situations. For example, if my firm employs a person and I give an employment benefit by paying for part of that person’s health care … and part of the health care of his wife, and then his wife divorces him, I have to keep providing health care to her for a period of time after the divorce.
The Federal government did put some outs in place, though: if I employ 19 people or fewer, these laws do not apply to me.
Today, I received a letter from the government of Massachusetts today, explaining that in Massachusetts, these loopholes have been closed by state law.
Even if I employ only two or five people, I must pay health insurance to the following non-employees:
- people who once worked here, but quit – 1.5 years
- ex-spouse of employee – 3 years
- son or daughter of an employee who turns 18 – 3 years
- retired ex-employee (if firm goes bankrupt) – life of ex-employee
- wife and children of retired ex-employee (if firm goes bankrupt) – life of ex-employee PLUS 3 years
So, here I am, having risked absolutely everything I own, having gone with out salary for three years, and I am now being told that if I hire somebody, and he gets married in Vegas while drunk, then gets a divorce the next day, I’ve got to cover the bimbo into the next decade? (Feel free to add in the gender-reversed variation of that, as well – I’m equally apalled that I might have to pay for an employee’s ex-husband’s meds).
…and if the firm goes bankrupt, I – personally – am still on the hook for many classes of benefits?
It is a testament to the American character that even when we are this tightly bound by the chains of the State, we, as a people, still start new businesses.
That, or maybe it’s a testament to our stupidity.
But, seriously, can anyone make a reasonable claim that it would be immoral for me to walk down to the Statehouse and shoot every legislator who voted in favor of this law?
March 30th, 2007 at 10:15 am
I assume that’s a rhetorical question. Have you looked at the small business environment north of the border? I assume it’s more favorable. I’d consider moving, Komrade, while your papers are still in order.
March 30th, 2007 at 10:44 am
If the firm goes bankrupt how is it supposed to pay medical coverage for a layed off employee? Magic money?
March 30th, 2007 at 12:13 pm
Are you referring to Ted Kennedy’s COBRA thing that’s supposed to let you keep your health insurance while you’re between jobs? Or what weird program is this? I didn’t think the employer paid much or anything for COBRA since the employee’s premiums usually go up to about $500/month. And I know for sure my company isn’t paying health insurance for me or anybody I know the day after I quit.
March 30th, 2007 at 12:16 pm
You’re personally responsible? What’s the point of incorporating, then?
March 30th, 2007 at 12:50 pm
That was my assumption, buy maybe they merely mean that – to the degree the corporate can afford it – it must pay even after declaring bankruptcy.
March 30th, 2007 at 7:39 pm
Miss Hathaway, take a memo: Do not ever, never incorporate in the state of Massachusetts. Any office in that region will be in New Hampshire.
March 30th, 2007 at 10:17 pm
JMD Says:
“If the firm goes bankrupt how is it supposed to pay medical coverage for a layed off employee? Magic money?”
I think the people who draft laws like this really believe money is just magically made as needed by businesses. They seem to think that you can always come up with just a little more money for them from somewhere – “you have your own business, don’t you?”
Is the law listed on-line where we can read the whole thing? This is unbelievable.
To distort the title of Coyote Blog’s post on this:
At What Point Does TJIC Shrug?
March 31st, 2007 at 9:49 am
Maybe I asked too many questions in my other post above. Can you at least tell me the name of the program that requires this so that I can look it up with Google?
March 31st, 2007 at 10:48 am
Doesn’t matter where you’re incorporated. If you have the requisite number of employees in MA, MA’s laws/rules apply to you with respect to them.
March 31st, 2007 at 10:56 am
COBRA doesn’t cost an employer much, if anything. When an ex-employee elects COBRA coverage, he can be charged as much as 102.5% of the premium the employer is paying (the extra 2.5% is to cover overhead/admin).
March 31st, 2007 at 11:46 am
E and I looked into this a bit, and all we came up with was the mini-COBRA stuff which, as other posters suggest, is not payed by the employer. Is the letter you got something different?
March 31st, 2007 at 12:15 pm
Ah, Pete and QM are right; I stopped reading after page 3, when I got pissed and threw the paperwork in my “deal with it later” pile…but on page 4, it says “How much can an emplyer charge for continuation coverage? … up to 100% of the group’s monthly premium…plus 2% for administrative costs”.
So.
Errr.
I retract 98% of my vituperation.
March 31st, 2007 at 12:31 pm
Doesn’t matter where you’re incorporated. If you have the requisite number of employees in MA, MA’s laws/rules apply to you with respect to them.
I knew there was a reason the dayjob isn’t expanding the manufacturing site they have in Mass.
I hope the same guys that passed this law aren’t also the same guys lamenting job flight to Asia. ‘Cause if they are it reveals that your legislators are learning disabled. Which saddens me.
Not that the crowd in Madison is any better.
March 31st, 2007 at 9:21 pm
I totally forgive you for not making it to page four. I’m sure as a small business owner you don’t get many communications from the government that have good news buried within them. Other hand, I already quit my job to go east and get me some of that Massachusetts health insurance, so that’s awkward.
April 12th, 2007 at 3:02 pm
As a business owner who is providing health insurance benefits to his employees you need to get with the program. It sounds to me as if you are providing benefits to your employees without knowing anything about the benefits, employer responsibilities or employee rights.
COBRA (Consolidated Omnibus Budget Reconciliation Act) has been around for quite a while. It is not a new concept and is regulated Federally, not through your State laws. When an employer offers his employees insurance benefits, he usually pays for say, 80% of the insurance premium and the employee pays for 20%. Under COBRA, the employee pays the entire premium while they are still eligible to be on the insurance your company provides.
But, like I said, if you are a business owner you need to get with an insurance broker, consultant or someone and get informed. Or don’t offer insurance benefits to any of your employees.
July 8th, 2007 at 12:21 pm
In california (at least– could apply elesewhere) my brother lost his COBRA because the company he was getting it through changed insurers. Poof! No more coverage. Not that they told him this while he was still paying the bills… This was particularly annoying since he has a “pre-exisiting condition” (GASP!), so he was usually either outright refused private coverage or charged an exorbitant rate.
“pre-exisiting condition”: asthma. Has never gone to an ER for it, on 2 inhalers, 30 years old. COME ON!
July 10th, 2007 at 10:01 am
HR departments tend to attract the lowest IQ / lowest functioning folks in an entire organization.
IMO.
June 25th, 2008 at 4:09 am
Very interesting viewpoints indeed!
June 25th, 2008 at 2:25 pm
You mean to say you didn’t take advantage of this back in 2003 around the same time I did? I know *I* was writing Permabit checks to cover my own healthcare costs back then, and that let me know firsthand exactly how COBRA works. It provided me access to affordable healthcare for a limited time, in that I could pay a group rate for my (effectively) individual coverage.
June 25th, 2008 at 2:50 pm
[quote comment="148429"]You mean to say you didn’t take advantage of this back in 2003 around the same time I did? I know *I* was writing Permabit checks to cover my own healthcare costs back then, and that let me know firsthand exactly how COBRA works. It provided me access to affordable healthcare for a limited time, in that I could pay a group rate for my (effectively) individual coverage.[/quote]
I decided that I’d rather be uninsured – I’m relatively young and healthy.
I went without health insurance (but not health care – I purchased what I needed) for three or so years.
June 25th, 2008 at 11:52 pm
[quote comment="148430"]
I decided that I’d rather be uninsured – I’m relatively young and healthy.
I went without health insurance (but not health care – I purchased what I needed) for three or so years.[/quote]
Question: Had you fallen terribly ill, incurring n * $10,000 in medical bills, would you have taken those on, or let it fall on the taxpayer? That’s the main argument in favor of the mandatory health insurance experiment in MA — that young, healthy people who can afford insurance don’t purchase because they are young and healthy, and then the percentage that get sick disproportionately cost the state which feels an obligation to provide medical care instead of letting those people die.