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Thread: Healthcare bill causes companies to evaluate dumping coverage

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    Healthcare bill causes companies to evaluate dumping coverage

    This is just lovely and so unexpected! We got a real winner here folks!

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    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. Karen Forte, 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."

    Bigger questions loom over the new insurance markets that will be set up under the law.

    They're called exchanges, and every state will have one in a few years. Consumers will be able to shop for coverage among a range of plans in the exchange, with a guarantee they can't be turned down because of an existing medical problem. To help make premiums affordable, the law provides tax credits for households making up to four times the federal poverty level, about $88,000 for a family of four.

    Bredesen said last week that employers could save big money by dropping their health plans and sending workers to buy coverage in the exchange. They'd face a fine of $2,000 per worker, but that's still way less than the cost of providing health insurance. Employers could even afford to give workers a raise and still come out ahead, Bredesen wrote in a Wall Street Journal opinion piece.

    Employers are actively looking at that. "I don't know if the intent was to find an exit strategy for providing benefits, but the bill as written provides the mechanism," said Deloitte's Keckley, the consultant.

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    Re: Healthcare bill causes companies to evaluate dumping coverage

    Its been an open secret for awhile, every few weeks rumors fly from our bosses that our health benefits might be restructured.
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    Re: Healthcare bill causes companies to evaluate dumping coverage

    we got a letter a few weeks ago, stating that while no changes were 'currently' being planned, they could make changes next year... depending on how their internal study of the new law goes.

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    Re: Healthcare bill causes companies to evaluate dumping coverage

    Quote Originally Posted by reefedjib View Post
    This is just lovely and so unexpected! We got a real winner here folks!

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    I think what this article fails to take into account is that the very reason they provide a health insurance plan is to attract good employees. Pawning them off onto exchanges would result in a cut in those benefits and effectively cut their employees' salaries. Not a good way to either attract or retain good people.
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    Re: Healthcare bill causes companies to evaluate dumping coverage

    My company has informed us that our insurance will most likely be dropped this year do to an increase in cost. My company has offered health insurance to its employees since it formed in 1956.
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    Re: Healthcare bill causes companies to evaluate dumping coverage

    Quote Originally Posted by MaggieD View Post
    I think what this article fails to take into account is that the very reason they provide a health insurance plan is to attract good employees. Pawning them off onto exchanges would result in a cut in those benefits and effectively cut their employees' salaries. Not a good way to either attract or retain good people.
    Maggie, the article does actually cover this point:

    Another wrinkle: the health insurance tax credits available through the law are keyed to relatively Spartan insurance plans, not as generous as most big employers provide. Send your workers into the insurance exchange, and valuable employees might jump to a competitor that still offers health care.

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    Re: Healthcare bill causes companies to evaluate dumping coverage

    A few things here:

    1. Health insurance premiums have been going up, and health insurance benefits have been declining (or disappearing altogether), for years before the health care reform law took effect. Is there any evidence it has accelerated since the passage of the law? The law which hasn't taken effect yet?

    2. The so-called "Cadillac Tax" on expensive health insurance policies was a freaking REPUBLICAN idea (and a sensible one, I might add). Or at least, it was a Republican idea until the Democrats put it into the health care bill, and then suddenly all the Republicans in Congress opposed it. Purely out of principle, I'm sure.

    3. The White House is absolutely right that it isn't credible that businesses would already be planning to drop coverage because of a tax that won't hit them at all until 2018. A lot can change in that length of time, including A) Congress changes or delays the tax, or B) less comprehensive health care plans become available for a reasonable price. Furthermore, the time-value of money is such that any expenses 8 years out are chump change today. Any business that is planning for minor changes to the tax code 8 years in advance is ****ing retarded.

    4. Presumably, employers need to compensate their employees a certain amount of money in order to retain them. So if they're paying them less in health benefits due to tax changes in health benefits, they'll have to pay them more in income or vacation time or something else that isn't affected by health care reform. So it will balance out anyway.
    Last edited by Kandahar; 10-25-10 at 04:34 AM.
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    Re: Healthcare bill causes companies to evaluate dumping coverage

    Quote Originally Posted by Kandahar View Post
    A few things here:

    1. Health insurance premiums have been going up, and health insurance benefits have been declining (or disappearing altogether), for years before the health care reform law took effect. Is there any evidence it has accelerated since the passage of the law? The law which hasn't taken effect yet?

    2. The so-called "Cadillac Tax" on expensive health insurance policies was a freaking REPUBLICAN idea (and a sensible one, I might add). Or at least, it was a Republican idea until the Democrats put it into the health care bill, and then suddenly all the Republicans in Congress opposed it. Purely out of principle, I'm sure.

    3. The White House is absolutely right that it isn't credible that businesses would already be planning to drop coverage because of a tax that won't hit them at all until 2018. A lot can change in that length of time, including A) Congress changes or delays the tax, or B) less comprehensive health care plans become available for a reasonable price. Furthermore, the time-value of money is such that any expenses 8 years out are chump change today. Any business that is planning for minor changes to the tax code 8 years in advance is ****ing retarded.

    4. Presumably, employers need to compensate their employees a certain amount of money in order to retain them. So if they're paying them less in health benefits due to tax changes in health benefits, they'll have to pay them more in income or vacation time or something else that isn't affected by health care reform. So it will balance out anyway.
    Yeah, they're just using it as an excuse to screw their employees over in the name of profit.

    But you know what? I welcome it. Our being tied to employer-based health insurance has been dragging us down for decades. True competition requires that people have viable alternatives, but the tax advantage given to employers means that everybody ended up with whatever plan their employer decided on.
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    Re: Healthcare bill causes companies to evaluate dumping coverage

    Quote Originally Posted by Deuce View Post
    Yeah, they're just using it as an excuse to screw their employees over in the name of profit.

    But you know what? I welcome it. Our being tied to employer-based health insurance has been dragging us down for decades. True competition requires that people have viable alternatives, but the tax advantage given to employers means that everybody ended up with whatever plan their employer decided on.
    The tax advantage given to the employees receiving these healthcare perks is no small advantage either. In fact, I'd say it's more advantageous to the employee by a long shot. I'm with you, though. I think everyone should have their own healthcare plan that they can carry with them -- not have to change plans when they change employers.
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    Re: Healthcare bill causes companies to evaluate dumping coverage

    The exchange does not represent true competition as they have restricted health plans. The goal is admirable, but the healthcare bill does not deliver.

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