Will my employer drop my coverage? Unlikely.

Critics of health-care reform say that it would leave employers with little incentive to continue to offer health coverage to their workers.

Here's their argument in a nutshell. Under President Obama's proposal, if you work for a company with 50 or more employees, your employer would be able to choose between continuing to offer health benefits or paying a penalty of $2,000 per full-time employee  (not counting the first 30 employees).  In most cases, paying the penalty would be cheaper than the cost of offering health coverage. So, critics say, employers would drop coverage.

But is that what would really happen?  Probably not, because it doesn't happen today when employers have even less of a financial incentive to offer health benefits.

Consider that under our current system, not offering coverage costs employers exactly nothing. Yet 98% of businesses with 50 or more employees (the same ones who'd face the penalty under reform) voluntarily offer coverage to their full-time workers anyway.

Why do they do this? Because it is one of the benefits that job applicants value the most. In most lines of business, if companies didn't offer coverage, they would have a hard time attracting workers with the skills they need. 

But about half of all workers make too much money to qualify for these tax credits. And many who do qualify will still be better off getting their coverage through their jobs. So a sizable majority of workers will still look to employers to contribute to their health care, creating the same conditions we have today—employers who offer health benefits in order to attract skilled workers. 

In fact, this is exactly what happened in Massachusetts, which in 2006 enacted a set of reforms that are pretty similar to those being considered by Congress, except employers had to pay an even smaller penalty than the one Congress is considering. After reform, employer coverage actually expanded, as workers took up offers of employer coverage that they had previously declined, in order to comply with the state's individual mandate.

—Lynn Quincy, Senior Policy Analyst