To make Braunfeld analogy closer, wouldn't you'd need a law
that said, "if you aren't open 24/7, you have to pay an $X tax" -- or, in the
Sherbert context, "if you quit work without good cause, you have to pay a tax
equal to X% of your unemployment compensation"? I would think that either of
these situations would indeed be seen as a substantial burden on religious
practice (setting aside the separate discussion that Marty and I are having
about whether the employer mandate isn't a burden because, even paying the tax,
both secular and religious employers would come out ahead by dropping their
insurance policies). Or am I mistaken?
Eugene
From: religionlaw-boun...@lists.ucla.edu
[mailto:religionlaw-boun...@lists.ucla.edu] On Behalf Of Micah Schwartzman
Sent: Wednesday, December 18, 2013 7:19 AM
To: Law & Religion issues for Law Academics
Subject: Re: Are large employers really better off dropping health insurance?
Even if some employers have to pay more under the 4980H(a) tax, would that be
sufficient to show a substantial burden? In Braunfeld v. Brown, the Court held
that laws may indirectly burden religious believers even when they impose "some
financial sacrifice in order to observe their religious beliefs."
I'm not saying Braunfeld is fully analogous. The Sunday closing law did not
require Orthodox Jews to violate their religious beliefs, but that law did make
it more expensive for them to compete with businesses that opened on Saturday.
(The Court also noted the state could have exempted Orthodox Jews from the
closing law but did not, even though other states did offer such an exemption.)
Braunfeld might support Marty's argument. The government provides an option to
all employers: (1) pay a tax, or (2) provide coverage. If (1) doesn't burden
religion, and even if it's somewhat more expensive, Braunfeld seems to
contemplate that laws will sometimes work in this way. Provided a law doesn't
directly compel anyone to violate their religious beliefs, its imposition of
additional costs on religious practice is not sufficient to show a substantial
burden.
Marty didn't cite Braunfeld in his post, so maybe he wouldn't rely on it. And
maybe there are other problems with the analogy, but I wonder if the "no
employer mandate" argument turns on an empirical claim, at least if the cost
differentials are not so significant as to be tantamount to coercion -- as in
the 4980D tax for failing to comply with coverage requirements.
On Dec 17, 2013, at 9:10 PM, Volokh, Eugene wrote:
The heart of Marty's argument (I focus for now on item 1 below) is, I think, an
empirical claim: Large employers such as Hobby Lobby would be better off just
dropping coverage, paying the $2000/employee/year tax, "us[ing] some of [the]
enormous cost savings" to compensate employees for the lost coverage, thus
keeping the employees happy, and then pocketing the rest of the "enormous cost
savings." (Indeed, if employees grumble over the inconvenience or just the
change, the employers can split some of the rest of the enormous cost savings
with the employees -- a win-win proposition for employers and employees.) And,
if Marty is right, this would be true for employers generally, not just
religious employers. We should thus expect a large fraction of savvy employers
to take advantage of this option, purely out of respect for Mammon quite
regardless of God.
But I wonder whether this is empirically likely to be true, given not just the
nondeductibility of the tax, but also other factors, such as payroll taxes on
the compensation payment to the employees. It's not surprising that the
Justice Department hasn't made this argument, since the Administration has long
argued (unless I'm mistaken) that large employers won't drop employer-based
health insurance. And the Congressional Budget
Office,http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/121xx/doc12119/03-30-healthcarelegislation.pdf,
likewise took the view that only a tiny percentage of employers would drop
their health insurance, because "the legislation leaves in place substantial
financial advantages for many people to receive insurance coverage through
their employers, and it provides some new incentives for employers to offer
insurance coverage to their employees."
Now of course that was in 2011, and perhaps the analysis today would be
different. But the CBO's estimates still give me pause. And if the CBO is
right, and large employers generally would lose financially -- rather than gain
from capturing some of the "enormous cost savings" -- by dropping health
insurance and adequately compensating employees, then I would think Hobby Lobby
and others would be in the same position. The mandate, even enforced as a tax,
thus would be a substantial burden.
Am I mistaken in this? Marty, do you have any pointers to studies that support
your sense of the money flows on this, and contradict what I see as the CBO's
view?
Eugene
Marty writes:
1. On your first point, even if the 4980H(a) tax were the equivalent of a
$3000 assessment (because it's paid with after-tax dollars), the average cost
for providing health insurance to employees is, as I understand it, closer to
$10,000, so the employer would save about $7000 per employee. (In any event,
there are no allegations in these cases that HL or CW is significantly
differently situated than a typical employer, e.g., that they have a workforce
comprised of almost all single employees with no family coverage.)
In order to remain competitive for recruiting or retaining most of their
employees, the plaintiffs wouldn't have to kick in any extra money in salary,
because the employees would have their exchange-purchased plans subsidized by
the federal government (both in terms of the cost-savings realized by virtue of
the exchanges themselves as well as the government's premium tax credits and
cost-sharing reductions. To be sure, some of their more well-compensated
employees might have paid less in premiums for the HL plan than they would to
purchase a plan on the exchange (maybe -- again, there's no allegation or
evidence of that here). But to make up that hypothetical shortfall, and
attract those employees, HL need only use some of its enormous cost savings to
sweeten their salaries. (This is presumably what the many large employers who
do not provide plans will do.)
For all these reasons, it is difficult to imagine HL or CW --or, more to the
point, the average large employer -- being financially worse off if it pays the
assessment. (And again, there's no allegation of facts that would alter that
conclusion here, in any event.)
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