A recent report from the Jackson Hewitt Tax Service points out the substantial penalties large employers will pay next year in states that don’t expand Medicaid under the Affordable Care Act (like North Carolina). This is because large employers who have low-income employees and don’t provide heath coverage incur a penalty for their employees who can’t get Medicaid but can buy coverage on the health exchange:
“States that do not expand Medicaid for adults leave their large employers exposed to higher employer “shared responsibility” tax penalties under the ACA. The federal tax penalties to employers could total $1.03 billion to $1.55 billion each year in the 25 states that have not yet expanded Medicaid for adults.”
In NC, Jackson Hewitt calculates large employers will be penalized between $80 million and $100 million next year. These sorts of numbers have helped convince business interests from state chambers of commerce to associations of large employers to strongly support Medicaid expansion in many other states. While major NC business groups have so far chosen not to support expansion, as these huge penalties become more clear to larger employers in our state, it may be that pressure builds to join other state chambers on record for Medicaid.