One in 10 U.S. Employers to Drop Health Coverage

July 25, 2012

Around one in 10 employers in the United States plans to drop health coverage for workers in the next few years as the bulk of the federal health care law begins, and more indicated they may do so over time, according to a study by consulting company Deloitte, says the Wall Street Journal.

  • Deloitte's findings differ from estimates by rival firm McKinsey & Co. last year that found 30 percent of employers say they would "definitely or probably" stop offering health insurance after 2014, as well as calculations by the Congressional Budget Office that estimated around 7 percent of workers could lose coverage under the law by 2019.
  • In all, 9 percent of companies in the Deloitte study said they expected to stop offering insurance in the next one to three years.
  • Around 81 percent were planning to continue providing benefits, and 10 percent weren't sure.
  • Around one in three respondents said they could decide to stop offering health coverage if they find that the law requires them to provide more generous benefits than they do at the moment; if a tax on high-cost plans takes effect in 2018 as scheduled; or if they conclude that the cost of penalties for not providing insurance could be less expensive than paying for benefits.
  • Only 16 percent of respondents said that they would be likely to stop offering health benefits if their competitors did.

Benefits consultants have also said that their clients are considering changes to the way they offer coverage that fall short of dropping insurance altogether, including requiring employees to pay a greater share of costs, paying only a fixed amount toward workers' costs, and giving employees more generous insurance arrangements if they show healthy behaviors.

The Deloitte study found that many of those actions were already taking place. Around three quarters of respondents said they had increased the amount that employees contributed to their plans, and a similar proportion said they would do so in coming years.

Source: Louise Radnofsky, "Deloitte: One in 10 U.S. Employers to Drop Health Coverage," Wall Street Journal, July 24, 2012. "2012 Deloitte Survey of U.S. Employers," Deloitte, July 24, 2012.

For text:

http://online.wsj.com/article/SB10000872396390443437504577545770682810842.html

For study:

http://www.deloitte.com/view/en_US/us/Insights/centers/center-for-health-solutions/21c1f310fb8b8310VgnVCM3000001c56f00aRCRD.htm

 

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