Although there were only seven state-mandated benefits in 1965, there are nearly 1,000 today. While many mandates cover basic providers and services, others require coverage for such nonmedical expenses as hairpieces, treatment for drug and alcohol abuse, pastoral and marriage counseling. These mandates apply only to those health insurance policies controlled by state health insurance laws - usually policies purchased by small businesses and individuals. Moreover, Congress appears likely to pass even more mandates in the future. Who Pays for Mandated Benefits.
Many employees believe their employers pay for the insurance they provide.
However, economists recognize that employee benefits are a substitute for wages in the employee's total compensation package. Higher benefits often force employees to take lower wages whether they like it or not. A 1990 survey of the literature by National Bureau of Economic Research economist Olivia S. Mitchell found that the cost of mandated benefits is usually borne by employees in the form of reduced wages, reduced work hours or loss of employment. The Impact of Mandates. While mandated benefits mean that people with health insurance have more health care options, they also mean that fewer people are insured.