This is the Cato Daily Podcast for Wednesday, May 28, 2014.

I'm Caleb Brown.

The IRS has told employers that giving employees cash to secure their own health insurance

won't protect those employers from stiff penalties

associated with failing to provide Obamacare compliant coverage.

But the incentives involved here may tell a different story.

Michael Cannon, Director of Health Policy Studies,

the Cato Institute explains.

This headline needs a little bit of unpacking,

it appears, based upon what the New York Times is asserting Robert Payer writes,

IRS bars employers from dumping workers into health exchanges.

I should correct that.

He probably didn't write the headline but so what has the

IRS done and what changes with respect to

Workers relationship with their

health insurance.

That headline doesn't quite capture the substance of the story.

The main reason why employers might dump health benefits for their employees

is because for low-wage workers the subsidies that are available through Obamacare

are greater than the tax benefit they get from getting health insurance

through an employer, plus the penalty the employer has to pay if the employer doesn't

offer them insurance.

...