The debate over the Affordable Care Act will be heating up, once more information comes out about the numerous unintended consequences created by this legislation, particularly regarding new government rules and regulations. We have seen political firestorms and Supreme Court arguments thus far, but pretty soon our insurance coverage could be in serious jeopardy. Should health care costs continue to rise, employers will be faced with some tough decisions.
Last week the House Ways and Means Committee released a report which argues that the health reform law, commonly referred to as Obamacare, could lead to employers dropping health insurance coverage for their workers. Other organizations may be forced to change their health insurance plans to meet government mandated essential benefits also. What does this mean for you? How about losing health insurance coverage because your boss is sick of dealing with new government rules and regulations? Believe me, this is a very real possibility.
The Committee sent letters to each of the Fortune 100 companies asking them several questions. Of those surveyed, 71 companies responded. Collectively, the respondents employ 6 million people. They would save $28.6 billion in 2014 alone, if they dropped employee coverage and paid the Obamacare penalty instead. Unfortunately, because costs continue to spiral out of control, this could happen. Businesses might be forced to make tough economic decisions, ultimately hurting employees.
Here is the situation. The average health insurance premium for a worker varies, but it is safe to say $5,000 per year, per employee, and a few thousand more for a family premium. The President’s health reform legislation includes a fine for employers who have more than 50 workers if they do not provide health insurance. Even if they do provide health insurance, but their workers opt to purchase a cheaper plan from the government run health insurance exchange, they could still be fined.
Put yourself in their place. How would you feel if you had a cabinet company with 60 employees and tried to be a good boss by providing health insurance, only to find out it is not acceptable according to new government standards? Premiums on existing company policies continue to go up, and the new policies required by the government are far more expensive, so your employees drop your policy in favor of a cheaper one at the health insurance exchange. Now you are stuck with a fine. Times are tough and you got into this business to build cabinets, not to mess with new rules, regulations and fines that were not there 20 years ago.
This boss will likely drop coverage all together and pay the $3,000 fine per employee (the first 30 employees are exempt). When this happens workers will be pushed onto government run health insurance exchanges, paid for by the rest of us through higher premiums. This cost problem is not going away and many insurance policies will be dropped like a hot potato.
Continue to educate yourself, vote and be an active citizen. This legislation is going to impact all of us, so check back regularly for more content on this subject.
Some more reading on this topic:
Two Original Reports on this Topic