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Employer Provided Health Insurance may Not Stay

by Vanessa Jones on May 21, 2014 at 3:58 PM
 Employer Provided Health Insurance may Not Stay

A report from S&P Capital finds that 90% 0f American workers who receive health insurance from large companies may have to enroll through Obamacare exchanges by 2020 for coverage instead. The health law carries many mandates, fees and taxes which make it unaffordable for the employers to provide health benefits.

The fee levied by Obamacare on group plan sponsors is for funding the Patient Centered Outcomes Research Institute (PCORI), a government-sponsored organization charged with investigating the relative effectiveness of various medical treatments.

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The federal government wants that private firms pay a PCORI fee of $2 per covered life now - and pay until 2019 according to health inflations. In businesses with more than 10,000 employees the employers have to pay Temporary Reinsurance Fee to stabilize premiums in the individual insurance market. This fee could cost the company $15.3 million from 2014 - 2016. A 40% excise tax on expensive insurance plans could cost the company a tune of $378 million in 5 years. Under Obamacare's, employer-sponsored health insurance, adult children - until 26 years of age had to be covered under their parent's policy, plus 100% of the preventive care services - like immunizations, contraceptive care and screenings would have to be covered.

Over the next ten years, the Obamacare health law could cost large employers $151 billion to $186 billion. That's about $163 million to $200 million in additional cost per employer or $4,800 to $5,900 per employee solely attributable to the health reform law.
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Employers would probably pass these costs to their workers. According to a recent Mercer survey, 80 percent of employers were considering raising deductibles or had already done so. Employers might pay fines as a cheaper option.

Companies could also offer a raise to a chronically sick employee, so that he could avail a better coverage through the health exchange and still save money. It would be a benefit to both the parties. When employers dump their sickest employees into the exchanges, the numbers could spiral even further upward. According to the president - Obamacare would provide all Americans with health coverage. At the same time large employers would be taxed with nearly $200 billion for the employer sponsored health insurance which would be destroyed as a result.

References:

Sally Pipes, May 2014

Hannah Punitha (IRDA Licence Number: 2710062)

Source: Medindia
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