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Obamacare a minefield for workers in Oklahoma

by The Oklahoman Editorial Board Published: July 10, 2012

OBAMACARE'S perverse incentives promise tough times for Oklahoma workers and state economic growth. Starting in 2014, employers who don't provide the government-approved level of employee health insurance face a new tax.

Businesses with fewer than 50 workers are exempt. Based on Oklahoma Employment Security Commission statistics, 94.5 percent of Oklahoma employers won't take the tax hit.

However, those businesses employ just 42.1 percent of the state's workforce, which means the other 57.9 percent mostly work for businesses facing a tax dilemma. If those companies are hovering just above the 50-employee mark, there's a fast way to avoid the tax. It rhymes with “nounsizing.” You don't want to be the last guy hired at those firms.

If not, the cost of government-mandated insurance could simply lead those businesses employing 57.9 percent of Oklahomans to drop employee coverage and take the tax hit as the cheaper option. Those workers would then be required to get coverage through either Medicaid or a health exchange. Oklahoma may not expand its Medicaid program, so scratch that idea. As we've noted, Medicaid expansion would likely divert money from schools and roads.

The federal government will provide worker subsidies, but only if you buy a policy through a state exchange, not one established by the federal government. But Oklahoma officials may not set up a state exchange. And if they do, Oklahomans will be paying federal taxes to pay themselves subsidies, which makes as much sense as anything else in Obamacare.

For small employers, Obamacare creates a disincentive for growth. If you have 40-plus workers, you'll be financially penalized for exceeding 50. Some smaller companies can get tax breaks for providing worker insurance. Of course, those tax breaks mean less federal revenue to pay for things like, well, Obamacare, which the Congressional Budget Office predicts will cost $2 trillion when fully implemented. So that's a problem.

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by The Oklahoman Editorial Board
The Oklahoman Editorial Board consists of Gary Pierson, President and CEO of The Oklahoma Publishing Company; Christopher P. Reen, president and publisher of The Oklahoman; Kelly Dyer Fry, editor and vice president of news; Christy Gaylord...
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