Farm Contractors Balk At Obamacare Requirements

By April Dembosky
Kaiser Health News, February 11, 2016

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 low-margin business.

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 undocumented.

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.

http://khn.org/news/farm-contractors-balk-at-obamacare-requirements-2/

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 this topic:

“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 mandate; etc.”

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.