One in five companies with fewer than 500 employees say they are “likely” or “very likely” to discontinue company-provided healthcare coverage within five years, a survey reveals. (NewsMax)
The reason: The main provisions of Obamacare will be implemented in 2014.
And 43 percent of those companies expect employees to pay a greater share of healthcare costs this year, according to the survey by Mercer, a human resources and financial services consulting firm.
Less than 10 percent of larger companies — with 500 to 4,999 workers — say they’ll likely drop coverage in five years, as do about five percent of firms with 5,000 or more employees.
But almost 70 percent of those largest companies, and 60 percent of those with 500 to 4,999 employees, expect workers to pay a larger share of healthcare costs this year.
Nearly 150 million Americans now rely on company-provided healthcare benefits, and the price of those benefits has doubled in the past decade. The average cost to a large company of covering an employee with a family is now $15,745 a year, according to the Kaiser Family Foundation.
But individuals whose coverage is dropped would pay even more, since they do not receive the same tax breaks as an employer and can’t bargain with insurers the way a company can, although some lower-income workers can qualify for subsidies to buy insurance.
Under the Affordable Care Act, employers with more than 50 workers will eventually have to pay a fine of $2,000 for each employee if they don’t provide coverage, but many could decide simply to pay the fine rather than pay for employees’ coverage, according to The Economist.
So much for President Obama’s promise that “if you like your healthcare plan, you can keep your healthcare plan.”
A 2011 survey by consulting firm McKinsey found that 30 percent of employers would “definitely or probably” drop coverage after 2014.
That prediction was thought to be extreme, but later surveys find that around 10 percent of employers feel that way.
The Mercer survey also found that more than 45 percent of companies with fewer than 500 workers are considering adopting a “defined contribution” healthcare scheme, whereby employees receive a fixed sum to spend on health insurance rather than company-provided coverage.
Defined contribution plans make employers’ costs more predictable and employees more conscious of costs. But the danger, The Economist observes, is that employees will “delay seeking essential treatment for fear of the bill,” which “could leave companies with a sicker, less productive workforce.”