Presently employer-sponsored health insurance is the basis for America's health care system. The Affordable Care Act has brought some beneficial changes for individual consumers in the health insurance market. These changes make it easier to have health insurance without it being sponsored by the employer.
New research from the Employee Benefit Research Institute (EBRI) raises the question "Are employment-based benefits facing a 'crisis' or merely an uncertain future?"
AdvertisementPaul Fronstin, head of the Health Research and Education program at EBRI, said that the ACA "levels the playing field like it's never been before," because now health insurance coverage does not rely on employer sponsorship.
Earlier, most people had health insurance only when the employer sponsored it. The disadvantages were that health coverage was dependent on the person's employment and ended for him and his family when he left the company. Most employees would then enroll under Cobra which is not only expensive but temporary too.
Frostin also said that "One could argue workers won't need their employers any more for health benefits once the law is fully implemented and health exchanges become a viable option to employer-sponsored health benefits. That raises real issues about the future of employment-based health coverage."
Under the Affordable Care Act's exchanges - there is a wider variety of plans at a lower cost for individuals to choose from as the employer sponsored plans are very typical.
Dr. Ezekiel J. Emanuel, in his recently published book, "Reinventing American Health Care," predicts that by 2025, "fewer than 20 percent of workers in the private sector will receive traditional employer-sponsored health insurance."
S&P Capital IQ, a division of McGraw Hill Financial, came to a similar conclusion. S&P Capital IQ predicts that by 2020, 90 percent of American employees who currently receive health insurance through their employers could be shifted to individual health insurance and government Exchanges.
It is generally accepted that the shift will begin with small businesses where 60% will forgo employer sponsored health insurance and instead opt for individual health plans, with employer contributions by 2017.
While employers are facing difficulties paying the high premiums for employees, a few of them feel it is beneficial to offer health insurance as before, to retain key employees.
By offering traditional, employer-sponsored health insurance, the employee does not qualify for premium tax credits.
Employer-sponsored health insurance is changing dramatically as employers are switching to individual health insurance with an employer contribution - where the employee can get better health benefits.
Abby Rosenberger, August 2014
Hannah Punitha (IRDA Licence Number: 2710062)