The uninsured and under-insured are watching, with bated breath, as the Supreme Court of the United States decides on the legalities of government enforced healthcare for all.
Do you know who else is watching? Your employer.
This isn’t a post about if it should or should not be deemed legal. This is a post about what is going to happen to you at work if healthcare reform (as it is written now) becomes a bill.
There’s an ugly little secret that your employer probably isn’t telling you. Since I know this secret, I’ll share it. Sharing is caring! Telling you this will most likely result in me being blackballed from the Human Resources community. Oh well.
It won’t be the first time I’ve been honest about our dirty little HR secrets, thus resulting in my unpopularity among my peers.
Are you ready?
If healthcare reform passes through the court, and becomes fully implemented in 2014, your employer will consider dropping health insurance for its employees, and there will be many employers who no longer offer health benefits.
Yes. It’s true. I hope the state exchanges do a nice job with their health plan options (we still don’t know what they will offer), because it may become the only place you can go for insurance.
Why? Because of the “Pay or Play” provision. It’s very controversial to your employer.
Pay or play basically means, according to the way healthcare reform is written today, that your employer will pay a penalty one way or another. We (the employers) have to offer vouchers for employees to take to the state exchange should they choose to pass on our health benefits. We have to offer high cost plans. And we have to figure out your household (not just the employee, but the spouse as well) income. But no matter what we do or how hard we try to get it right, we will face financial penalties to help fund nationalized healthcare.
- If the employer offers health insurance, and you choose to take your voucher to the state exchange?
PENALTY FOR THE EMPLOYER
- If the employer offers insurance, and an employee simply chooses not to take the insurance or go to the state exchange?
PENALTY FOR THE EMPLOYEE
- If the employer chooses not to offer insurance at all?
PENALTY FOR THE EMPLOYER
- There’s also the “Free Rider” penalty employers face. If the employer’s insurance is consider unaffordable or low value, and the employee qualifies for government subsidies (any family of four that makes less that $89,000 per year qualifies)?
PENALTY FOR THE EMPLOYER
So if you look at it from the employer’s point of view, it’s just a whole lot simpler to NOT offer benefits and take ONE penalty, rather than offer benefits and wager the “Pay or Play” game to see who stays in and who goes out of the plan, ultimately resulting in unavoidable penalties.
It’s a whole lot cheaper for the employer to pay the proposed tax penalties than to pay for your insurance.
Currently, for employers with 50 or more employees, the penalty for not offering benefits will only be $2,000 to $3,000 per employee that qualifies for health insurance. In 2011, the average employer cost of healthcare per employee, on a family plan cost the employer over $10,000.
It sort of feels like government’s giving your employer a simple math equation. Are they trying to smoke out employer sponsored health benefits? I think so.
As it stands, most companies are better off paying the penalty, and simply raising employee wages to compensate for what they will lose in benefits.
They employees can then take their chances at the state exchanges. And hopefully *fingers crossed* they can find a great health plan like the one we offer. One that pays claims. One without a ton of red tape. I mean, most government run things don’t come with a ton of red tape, right?
I know, not all employer sponsored plans are great.
But some of them really are wonderful. Some of them truly take care of employees at very little or no cost to them. These are the plans that I am concerned we will lose in our country.
To date, healthcare reform has done many great things to employer sponsored plans, things that really aren’t costing employers much in the long run.
To name a few of my favorites:
- Children no longer have pre-existing conditions
- Children can stay on their parent’s plan until they are 26 years-old (longer in some states)
- Preventative coverage is paid for at 100%
I agree with you 110%.
I agree with you, the system is currently broken, and everyone should have access to affordable healthcare (even the sick and unemployed/underemployed). But some of these employer provisions don’t make sense.
Shouldn’t the employers just continue to make necessary changes that better the health care system? I think so. And I think most companies are fine with the changes we’re making. Heck, our company hasn’t charged employees co-pays for preventative care for years as part of our wellness initiative.
For those of you who have jobs, and you’re satisfied with your company’s benefits, I want you to ask your company this question:
Is there a chance that you’ll drop our health insurance in 2014 and force us to take coverage through the state exchange?
If they tell you there is not a “snowball’s chance in Hell” that they’d ever consider dropping your benefits… THEY. ARE. LYING. TO. YOU.
We are all considering it. All of us. And just like you, we’re waiting to see how this whole thing pans out with the Supreme Court. We want to figure out what will make financial sense for our companies.
What do you think about it? Do you agree that it makes it financial sense for companies to stop offering health insurance? Will you be upset if your employer chooses to pay (rather than play)?