Employers Looking at Health Insurance Options

They have some comments in this article from Deloitte, whom I feel is a source that you can count on to be blunt with the truth.  Deloitte’s executive director is saying that no large firm wants to be the first to drop coverage, but that most are willing to be a fast second.  Yet the officials in Washington keep saying that this Act will have the opposite effect.  I happen to agree with Deloitte.

How is it that White House Officials can continue to ignore what the majority of the people are saying through private research organizations?  I thought politicians were all about following the polls?  How about common logic?  Can they look at this through the eyes of common logic?  If the prices for employers to provide health care are going to go UP (as most economists are predicting), WHERE IS THE INCENTIVE?  Jason Furman, an economic adviser to President Barack Obama, says there will be more incentives for employers to provide coverage.  Name one.  All I see is the incentive of providing coverage vs. paying the fine, and the fine is going to be cheaper in the beginning.  Our economy is an employer’s marketplace right now.  Most employers can pay wages WAY under the value of the employee and not give any benefits and still have people climbing over each other in a frenzy to get the job because there simply aren’t enough jobs to go around right now.

 

Phil Bredesen
Democratic Tennessee Gov. Phil Bredesen speaks in Nashville

WASHINGTON – The new health care law wasn’t supposed to undercut employer plans that have provided most people in the U.S. with coverage for generations.

But last week a leading manufacturer told workers their costs will jump partly because of the law. Also, a Democratic governor laid out a scheme for employers to get out of health care by shifting workers into taxpayer-subsidized insurance markets that open in 2014.

While it’s too early to proclaim the demise of job-based coverage, corporate number crunchers are looking at options that could lead to major changes.

“The economics of dropping existing coverage is about to become very attractive to many employers, both public and private,” said Gov. Phil Bredesen, D-Tenn.

That’s just not going to happen, White House officials say.

“The absolute certainty about the Affordability Care Act is that for many, many employers who cover millions of people, it increases the incentives for them to offer coverage,” said Jason Furman, an economic adviser to President Barack Obama.

Yet at least one major employer has shifted a greater share of plan costs to workers, and others are weighing the pros and cons of eventually forcing employees to strike out on their own.

“I don’t think you are going to hear anybody publicly say ‘We’ve made a decision to drop insurance,’ ” said Paul Keckley, executive director of the Deloitte Center for Health Solutions. “What we are hearing in our meetings is, ‘We don’t want to be the first one to drop benefits, but we would be the fast second.’ We are hearing that a lot.” Deloitte is a major accounting and consulting firm.

“My conclusion on all of this is that it is a huge roll of the dice,” said James Klein, president of the American Benefits Council, which represents big company benefits administrators. “It could work out well and build on the employer-based system, or it could begin to dismantle the employer-based system.”

Employer health benefits have been a middle-class mainstay since World War II, when companies were encouraged to offer health insurance instead of pay raises. About 150 million workers and family members are now covered.

When lawmakers debated the legislation, the nonpartisan Congressional Budget Office projected it would only have minimal impact on employer plans. About 3 million fewer people would be covered through the job, but they’d be able to get insurance elsewhere.

Two provisions in the new law are leading companies to look at their plans in a different light.

One is a hefty tax on high-cost health insurance aimed at the most generous coverage. Although the “Cadillac tax” doesn’t hit until 2018, companies may have to disclose their exposure to investors well before that. A Boeing spokeswoman said concerns about the tax were partly behind a 50 percent increase in insurance deductibles the company just announced.

The tax is 40 percent of the value of a plan above $10,200 for individual coverage and $27,500 for a family plan.  Family coverage now averages about $13,800.

White House adviser Furman said blaming a cost increase next year on a tax that won’t take effect for eight years “stretches credibility very far past the breaking point.”

Read More from the Associated Press

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