The Wall Street Journal put together an excellent editorial yesterday on the intersection of Obamacare and immigration.
First, starting in 2016, employers with 50 or more full time employees are required to offer health insurance for each of their workers, or else pay a penalty of $3,000 per each person who fails to receive proper Obamacare coverage.
So what happens with the undocumented immigrants allowed to stay under President Obama’s Executive Action? The numbers are estimated to be upwards of 5 million people.
“The government’s petition says that the executive action intended to provide ‘work authorizations’ so that undocumented immigrants could find jobs in the U.S. without working illegally for less than market wages, which might harm American workers. But wait: Employers aren’t required to offer ObamaCare coverage or subsidies to these immigrants. The statutory language in the Affordable Care Act says that only ‘lawful residents’ are eligible, and the government’s petition specifically notes that the immigration action does not ‘confer any form of legal status in this country.'”
Therefore, the immigrants (with deferred deportation), are exempt from Obamacare. While that may be good for the taxpayer, it is not necessarily good news for the worker. From a purely financial perspective, companies could easily save the $3000 penalty cost per worker if they hire and employ an Obamacare-exempt immigrant instead of a citizen/resident subject to the Obamacare rules.
The Wall Street Journal sums up the scenario nicely:
“Suppose businesses subject to ObamaCare employ only 40%, or two million, of the up to five million immigrants covered by the president’s executive action. At $3,000 an employee, businesses would save about $6 billion a year. Companies already dealing with the added expense of operating in the Obama economy — burdened by regulations, high taxes and other barnacles — would find those savings hard to pass up.”
Exempting employers who hire these immigrants from the law’s penalties gives the immigrants a distinct market advantage over U.S. citizens. That flies in the face of the president’s statement that his executive action would not “stick it to the middle class” by allowing these individuals to “take our jobs.” It is also contrary to the government’s statement that the executive action would make it less likely that these undocumented immigrants hurt American workers by “illegally” working “for below market rates.” They could still work at below-market rates, only it would be legal.
All of this was inevitable. The root problem with ObamaCare is that one party rammed it through Congress without a single Republican vote, while the law’s supporters didn’t even read it, let alone vet it through congressional committees. As a result, ObamaCare as written was unworkable, and the administration has had to repeatedly amend it by constitutionally dubious executive fiat.
Now this flawed law is clashing with yet another constitutionally dubious executive action that the administration couldn’t be bothered to pass through the legislature.”
The Obama Administration may yet decide to grant Obamacare to these immigrants currently exempted. But for the time being, since their status presents a situation may wreak havoc in the business world, leaving the current court injunction against the immigration order in place is the only suitable solution until the Obamacare-immigration situation is sorted out. Otherwise, expect the economy to continue to weaken from this latest threat.