Montana’s Rib and Chop House in the Pittsburgh area is taking an innovative approach to providing health care coverage to employees, in spite of Obamacare. The Pittsburgh Tribune-Review reports the small business is using privately-run (not government-run) insurance exchanges to offer employees a variety of insurance plans.
This approach makes a lot of sense. Employers can offer a “defined contribution”—providing funds for health care without having to get involved in the bureaucracy of insurance mandates. Employees can then choose the insurance plan that best meets their needs for their family.
Of course, there is a downside, as the Tribune-Review notes:
There are other obstacles as well. One is a penalty under the Affordable Care Act that fines large companies $2,000 per employee for not providing coverage.
Another is the substantial tax benefit to workers from employer-sponsored health insurance that would go away if companies stopped buying health insurance.
“You’ve got to make the tax treatment for nonemployer-based coverage basically the same,” said Stuart Butler, an economist with the liberal Brookings Institution in Washington. “It’s got to be neutral.”
In other words it’s bad tax policies, not employers, that are blocking access to affordable health insurance. Employers get a tax benefit for providing insurance coverage. But individuals buying coverage for themselves don’t get the same treatment.
To encourage innovations that provide more choices, like those enjoyed by Montana’s Rib and Chop House employees’, policymakers should look to a couple of reforms Commonwealth Foundation has recommended for years.
Congress should level the playing field and treat individuals purchasing health insurance the same as businesses buying insurance. The state can do the same.