4 reasons why dropping coverage isn’t a good idea
Even by members of Congress, employers have been given reasons why the health care reform law will provide a financial incentive to ultimately drop coverage and steer employees toward a state- or federally-managed health insurance exchange, where various carriers will be competing for business.
The most persuasive of these arguments has been that paying any kind of penalty has got to be far less costly than trying to mitigate rising benefits expenses.
[See also: Employers confront costliest reform provisions]
But, according to a white paper released Friday by Truven Health Analytics, that’s just not the case. No matter how employers want to go about dropping health care benefits, it won’t have any short- or long-term advantages.
To prove this, Truven looked at a few scenarios. The firm examined 33 large employers with more than 900,000 employees in the university, pharmaceutical, retail, financial and manufacturing industries.
They determined that if large employers end up dropping health insurance, they may do it in one of four ways:
- They eliminate group coverage and subsidize the full cost to employees of obtaining coverage through an exchange
- They eliminate group health and subsidize exchange coverage, but without spending any more per employee per year than their current group plan.
- They drop coverage and provide sufficient additional compensation to reduce overall employer health care costs by 20 percent.
- They drop coverage without any additional subsidy to the employee to purchase coverage on their own. >>> http://www.benefitspro.com/2012/07/09/4-reasons-why-dropping-coverage-isnt-a-good-idea