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PolitiFact: Majority of companies not affected by employer mandate

The statement

The employer mandate "affects only 5 percent of businesses in this country."

U.S. Rep. Chris Van Hollen, D-Md., in an interview with Fox News

The ruling

We contacted Van Hollen's office, and the staff there referred us to a couple of key sources. First, the Census Bureau surveys the business community and in 2010, it counted about 5.7 million firms. Of those, about 211,000 had 50 or more employees. Do the math and you find that 3.6 percent of all firms would be subject to the employer mandate.

Van Hollen's other source is a report from the Congressional Research Service, the nonpartisan think tank for Congress. The study published last month found that 96.3 percent of firms would be exempt from the employer mandate because they were too small. Flip that around and 3.7 percent would be affected by the requirement to offer insurance.

So if anything, Van Hollen overstated the fraction of firms that would need to worry about the mandate.

You have to use a certain amount of care when looking at estimates of the number of firms, because different groups use different methods. The highly respected research center the Kaiser Family Foundation reports that 7.3 percent of firms have 50 or more workers. Kaiser, however, only surveys companies with at least three employees. That eliminates more than 2 million firms that the Census Bureau includes.

Another widely used source, the Agency for Healthcare Research and Quality, located within the Department of Health and Human Services, produces the Medical Expenditure Panel Survey. According to its tally, about 25 percent of all establishments are firms with 50 or more workers.

We did not find a clear explanation for these differences, but experts suggested to us that they could be due partly to varying survey methods and partly to varying definitions of establishments (as a place of work) and firms (as a single owner of several establishments).

That said, the Census Bureau enjoys broad trust, and we weigh its numbers accordingly.

As one caveat, looking at the mandate through the lens of business does not tell the whole story. During his television interview, Van Hollen began by talking about the number of people and then brought up the number of companies. The two are quite different. According to the Census Bureau, about 72 percent of workers in companies — which is not a complete count of all workers — are in firms with 50 or more employees.

While over 90 percent of those firms offer insurance, Christopher Conover, a policy analyst at the Center for Health Policy and Inequalities Research at Duke University and an adjunct scholar at the American Enterprise Institute, cautioned that just because you work at a company that offers insurance, that doesn't mean you actually get it.

"With 44 percent of working uninsured located in firms with 50-plus employees," Conover said, "it's obvious that the employees lacking coverage do not work exclusively for the tiny fraction of such firms not offering coverage."

These people might work part time, or might have declined coverage, or they might be waiting to be eligible for coverage.

We rate the claim Mostly True.

Edited for print. Read the full version at PolitiFact.com.

PolitiFact: Majority of companies not affected by employer mandate 09/20/13 [Last modified: Friday, September 20, 2013 8:35pm]

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