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?"
Paul 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
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
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
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)