By Tom Curry National affairs writer
updated 9/9/2009 8:56:33 AM ET 2009-09-09T12:56:33

Claim: House Democrats' 'pay or play' rule would force some employees to buy their own coverage.

The House bill includes a “play-or-pay” provision requiring most employers to either insure their workers or pay a penalty equal to 8 percent of the total wages paid to their workers. The bill also has an “individual mandate” requiring most Americans to buy insurance, with taxpayer subsidies provided to low-income people. It's not clear whether employers who now insure their workers would continue to do so, or whether they'd opt to just pay the fine and cut loose workers.

Is it fact or fiction? Fact. Firms who chose to pay the 8 percent penalty instead of insuring their workers “would make no direct contribution to those workers’ insurance costs,” says the Congressional Budget Office (CBO). The workers would need to buy coverage from another source in order to comply with the individual mandate. About three million people (including workers’ spouses and dependents) would be dropped from employers’ plans under “pay or play,” says CBO. But if their income were less than $43,000 for an individual or $88,000 for a family of four, they’d get subsidies to buy coverage, or they’d be eligible for Medicaid.

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