TALLAHASSEE -- Republican lawmakers say they are champions for Florida’s businesses.
But their failure to expand health insurance coverage to 1 million or more Floridians will put many employers in a financial lurch.
Without a deal on health care, business owners across the state face the predicament of either paying to provide health insurance for their employees or facing federal government fines. Either way, the Legislature’s inaction will saddle many businesses with additional costs that could reach, in total, close to $150 million next year.
“If you do not do Medicaid expansion, or something similar to that, there is a very real penalty imposed upon the employers of the state of Florida,” said Sen. David Simmons, R-Altamonte Springs, who had pushed some compromise.
It’s only one wrinkle from legislative inertia.
In another, non-U.S. citizens living legally in Florida will be eligible for subsidized health insurance while some poor U.S. citizens will get nothing.
Florida businesses have long complained about the confusion and uncertainty surrounding the 2010 health care law. The Legislature’s failure to reach a compromise on Medicaid expansion just adds another layer.
The historic U.S. Supreme Court ruling upholding the law actually created some of the current problems. While justices ruled that the centerpiece of the law — a requirement that most everyone have health insurance — was constitutional, they struck down a provision that would have essentially required states to expand Medicaid.
By giving states a choice whether to expand, the court created loopholes about who would be covered and how, and who would be left out.
Part of the law that remained in place requires businesses with more than 50 full-time employees to provide health insurance coverage to anyone working more than 30 hours a week. Many people in agriculture, tourism and hospitality would have been eligible for an expanded Medicaid program.
But with no Medicaid expansion, those workers must either get health insurance from their employers, or they can turn to a federal health exchange to purchase insurance.
If they use a federal exchange, their bosses will be penalized.
And the fines are steep.
In Florida, about 400,000 people who would have qualified for Medicaid expansion are eligible to purchase insurance on exchanges.
If just one employee goes on the exchange, business owners are required to pay a fine of $2,000 for each of their full-time employees (minus the first 30). In a company of 200, that could translate into a fine of $340,000.
In total, Florida employers could face at least $145.7 million in federal penalties per year, according to tax preparation service Jackson Hewitt.
The eye-popping number is why business groups joined Democrats and Senate Republicans in pushing to accept federal Medicaid money.
Expanding Medicaid alleviates “additional costs on our businesses,” said Associated Industries of Florida general counsel Tammy Perdue.
The quirk about health care for U.S. citizens and non-U.S. citizens is another result of the Supreme Court’s bifurcated decision, and one that could have significant consequences in Florida.
Congress created two different systems for people living below the poverty line. U.S. citizens would receive Medicaid through the expansion. Non-U.S. citizens would be eligible for subsidized private insurance.