Health Care Reform May Hurt Employer Coverage

The new health care laws were not intended to hurt the employer provided plans that were already in place, but many employers are already increasing costs and deductibles that employees must pay out of pocket.

This increase is an effort to help offset the new fees and taxes being charged to the employer on the coverage they provide. Other employers are considering dropping the coverage altogether.

When asked, White House officials stand behind the Affordable Care Act and state that it includes many benefits that increase an employer’s incentives to offer coverage. Yet many of those businesses who do have coverage are shifting the additional costs incurred from the act onto the employee, even before they go into effect.

Paul Keckley, executive director of the Deloitte Center for Health Solutions says that companies are not wanting to be the first to drop their offered coverage, but that many are willing to jump in quick to be second.

Some of the factors employers are considering include new insurance markets for those needing benefits and a large tax to be added to employers that offer coverage.

The large tax will be issued on high cost insurance plans that have the most coverage and will take effect in 2018. The cost of the tax is quite high and has businesses rethinking what they offer.

White House adviser Furman says that for a company to blame their cost increases today on a tax that will be eight years away is stretching credibility past its breaking point.

Many feel that the new insurance markets the law is requiring to be set up with be a profitable alternative for employers. They can drop their coverage offering and send employees into the exchange to get their benefits.

Still, makers of the law believe that the benefits of offering coverage outweigh the risks to employers.  Those who do not offer coverage are likely to have to pay more which increases their medicare and social security taxes as well. They also have a fine per person under the law. Finally, they lose the tax deduction they get for offering coverage.

Photo credit: the princess brat

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Norma is a full-time homeschooling mom in addition to being a writer. When not tackling hard subjects like Algebra, she loves writing in general and will give virtually any topic her all. In addition to her writing in the consumer and entertainment field, Norma works as a ghostwriter and has plans to author her own book.