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Will Employers Eliminate Health Coverage In 2014?

'Yes' says the smart money.   From AIS's Health Reform Week;
"Health insurance reform mandates already in effect are having a major cost impact on midsized employers across the U.S., according to a new actuarial modeling analysis by Lockton Benefit Group. On average, employers with 2,000 to 10,000 employees tacked another 2.5% onto their health insurance costs since mandates went into effect last September — primarily due to reform requirements extending dependent coverage to age 26 and eliminating lifetime and raising annual coverage limits, the firm says. Moreover, costs related to these mandates are just the tip of the iceberg — to the point where many employers could consider termination of their plans in 2014."

[...]

"Employers deciding to eliminate health plan coverage in 2014 will save an average of about 44% off their current health care spending, according to Lockton’s actuarial modeling. Thus, an employer spending $10 million today would spend $4.4 million to jettison its plan and pay the relatively smaller financial penalty, Fensholt explains. He notes that the employer doesn’t save the entire $10 million because of the penalty, which is nondeductible, as well as the lost tax deduction on its current spending, and lost Social Security tax savings on employee pretax premium contributions.
More:

Two Views Of the Future Of Employer Sponsored Coverage.  Booz&Co calls the demise of employer-sponsored coverage "greatly exaggerated."  They're wrong.

What would happen if employers walked away from health coverage? Kaiser Health News calls it "..a bailout of epic proportions."  I'll take that bet.


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