Filed under: Groups (100+ Employees), Groups (2-50 Employees), Groups (51-99 Employees). Tagged as: group health insurance, health insurance reform.
The bulk of PPACA’S provisions take effect in 2014 causes the question of whether or not large and small employers will cease to provide healthcare coverage to their employees. The Obama administration and the Congressional Budget Office say not too many will, but numerous studies, papers, briefs, reports, employer questionnaires, surveys and comments from other prominent Democrats suggest that at least a few more employers than official projections indicate may drop their coverage. According to a report by the Urban Institute’s Health Policy Center, discussed in a previous blog article, one argument is that through the new exchanges, companies will likely stop their sponsored coverage, increase their employee’s salaries to cover purchasing individual policies through the exchange and pay the penalties under the ACA.
The House Ways and Means Committee issued a report that suggests that PPACA’s subsidy costs could skyrocket, since many larger employers would be financially better off if they drop their group coverage and allow employees to seek individual coverage through the state-based health insurance exchanges. The Ways and Means report echoes the findings of a House Energy & Commerce Committee report released two weeks ago that also found that PPACA will “raise costs and increase uncertainty for job creators, and jeopardize coverage for American workers.”
What does this mean to you?
If employers choose to drop coverage, they will lose a way to set themselves apart in a competitive market. This may not be in their best interest if they want to obtain high caliber employees. Employers will have to make a personalized decision about whether or not dropping employer-sponsored coverage could hinder their position in a highly competitive market. Agents will play a key role in helping employers make these important decisions.