The Leadership Conference on Civil and Human Rights

Civil rights groups are opposing a provision in the Senate Finance Committee's health care reform bill that will give employers an incentive to discriminate against minorities, low-income people, and people with disabilities.

The "free rider" provision requires employers of firms with 50 or more employees who do not offer health coverage to pay the average subsidy cost per person for all employees who are eligible for a subsidy and who purchase coverage in the new health care plan.  Employees whose family income is below about $67,000 for a family of four qualify for a subsidy. But employers would not have to pay for employees with higher family incomes.

The provision creates a powerful incentive for employers to fire – or not to hire – the very people that health care reform is supposed to help.  For instance:

• Employers will have an incentive to hire a woman whose spouse has health insurance coverage for her family, instead of hiring an uninsured single mother of two who qualifies for the new government insurance subsidy.
• Employers will have an incentive to lay off employees who receive the subsidy, because it will save the business even more on labor costs.
• Employers will have an incentive to avoid recruiting at community colleges, historically black colleges and universities, and minority-serving institutions to reduce applications from people likely to need health subsidies.
• Employers will have an incentive not to hire people with disabilities who don't have the option of going without coverage because of their conditions.

"We all agree that Congress has a very important and complex task in passing legislation to give every American access to quality, affordable health care. In doing so, however, Congress has a special obligation to make sure that the legislation does not harm the most vulnerable in our society who need the benefits of health care reform the most," said Wade Henderson, president and CEO of the Leadership Conference on Civil Rights.  "We urge the Senate Finance Committee to change this provision."

More information about the provision.