HARRISBURG Pa. Restaurateurs and other business operators in Pennsylvania have assailed Gov. Ed Rendell's plan to levy a payroll tax to fund state-subsidized health insurance.
Rendell said he wants to impose the tax on some 100,000 employers who do not currently offer health-care insurance coverage to their workers. Under the so-called play-or-pay plan, employers with more than 50 workers would pay 3 percent of their payroll - called a "fair share assessment" - for the first three years. In the fourth year, the rate would rise to 3.5 percent. Businesses with fewer than 50 employees would be exempt for the first year.
Opponents of Rendell's plan argue that it might persuade some employers to jettison their private health coverage if they discover that it is cheaper to pay the tax for state-subsidized insurance. Business groups have said they would rather see health care costs reduced through more market competition in the medical insurance industry, tax incentives and letting small businesses pool coverage to achieve better rates.