Thursday, February 11, 2016
Kaiser Health News
February 11, 2016
Farm Contractors Balk At Obamacare Requirements
By April Dembosky
Obamacare is putting the agricultural industry in a tizzy.
Many contractors who provide farm labor and must now offer workers
health insurance are complaining loudly about the cost in their already
Some are also concerned that the forms they must file with the federal
government under the Affordable Care Act will bring immigration problems
to the fore. About half of the farm labor workforce in the U.S. is
Last year, employers with 100 or more full-time employees had to offer
health insurance to their workers or pay a stiff penalty. This year,
employers with 50 to 99 full-time employees must comply.
"There's definitely going to be some repercussions to it," said Jesse
Sandoval, a farm labor contractor based in Stockton, California.
Sandoval has about 100 workers on his payroll. When farmers need a crew
to pick cherries, pumpkins or asparagus, they call him to send the
workers. He has to offer them insurance this year, and he's smarting
over the price tag. At $300 a month per employee, he's looking at a
$30,000 monthly bill.
Sandoval said he can't absorb the hit. "The numbers aren't there," he
said. "My margin is 10 percent, and I have to increase expenses 10
percent? Well, that doesn't work."
So, like a lot of contractors, he's passing the bill on to the farmers,
who in turn are passing the bill on to the farm workers. Under the
Affordable Care Act, employees can be asked to contribute 9.5 percent of
their income toward health premiums.
But for farm workers who pick oranges or peaches for $10 an hour, that's
still too much. Agostin Garcia of Fresno, California, said the two
contractors he works for near Fresno offered him insurance directly. But
when he saw the price tag, he turned them both down.
"For me, I'm the only one in my house who works," he said. "There's five
of us in the family. It just wouldn't work. Either I pay for health
insurance, or I pay the rent and utilities."
Garcia said only a fraction of his co-workers have signed up for
coverage. He said when farm labor contractors hand out packets
explaining the coverage, the page where workers reject it is right on top.
"I think they do it intentionally," Garcia said. "They comply with the
laws by saying, 'I offered.' But they know that nobody's going to accept
it, they know that nobody's going to pay those amounts."
The cost isn't the only thing about Obamacare stressing people out in
the ag industry. Some are worried about immigration problems. Employers
have to file new health care forms with the IRS for all their workers,
whether or not they accept the insurance.
Farm labor contractors say they're stuck in a Catch-22. Technically,
immigrants who are in the U.S. illegally aren't eligible for Obamacare
benefits. But employers can't admit that any of their employees may be
working illegally, so they have to offer the insurance or face stiff
fines from the IRS, maybe even a discrimination claim.
Comment by Don McCanne
Seasonal agricultural workers do not fit into a neat slot in the
dysfunctional, fragmented financing system that President Obama and
Congress have selected for us.
Following is a paragraph from my Quote of the Day of June 1, 2010 on
"Just briefly touching on some of the policies inherent in PPACA:
employers with over 50 full-time equivalent employees will have to
purchase coverage for their seasonal employees or pay a $2000 penalty
per employee, even though that may be a staggering bill because of a
temporary ten-fold increase in the number of employees; since most
seasonal employees are uninsured, moving in and out of coverage during
the harvest season results in instability of coverage; many seasonal
workers are undocumented and thus ineligible for purchase of plans in
the exchanges, defeating the purpose of the individual mandate; seasonal
workers might be able to obtain care through community health centers,
though that depends on having clinics accessible and may mean that
important specialized services may not be provided, and the mere
existence of such clinics may not fulfill the mandate requirements
anyway; though the workers and their families might be eligible for
Medicaid on an income basis, that may conflict with the employer
At that time, I wrote, "What would fix this would be a single payer
national health program with automatic enrollment for everyone, financed
separately though equitable tax policies."
Yet our politicians rejected single payer, and instead insisted on
improving the Affordable Care Act incrementally. Now that the topic of
single payer has become one of the leading issues in the presidential
campaign, there has been a surge of politicians, policy wonks, and
columnists who are telling us that only incremental reform can work.
They say we have to build on the current system.
So what incremental steps have been taken on improving coverage of
seasonal agricultural workers since I wrote the above critique over five
years ago? None. Now give some thought to incremental changes that we
might introduce now that would ensure seasonal agricultural workers
affordable access to health care throughout the year. (Pause.) Still
thinking? We'll give it some more time. Okay. Ready to describe the
incremental changes to ACA that would ensure year-round affordable
coverage for these workers? Thought not.
Regular readers understand that incremental reforms cannot do much more
than tweak the current system. The reason is that the health financing
infrastructure perpetuated by ACA is so highly flawed that it cannot be
repaired. It proves the lie that "we have to build on the system we
have." We need a new, effective infrastructure.
The next time that someone says that single payer is too hard
politically, demand that she tell you the precise incremental changes
that will ensure health insurance coverage for the seasonal workers who
help put food on our tables. As she stammers, or maybe repeats a
non-responsive 15 second canned sound bite, emphatically point out that
single payer would do it.
/Physicians for a National Health Program (PNHP) is a nonpartisan
educational organization. It neither supports nor opposes any candidates
for public office./
at 3:00 PM