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Employer health insurance could be a fading trend

Ezekiel J. Emanuel, who helped devise the Affordable Care Act, admits that the law is likely to change the way most Americans are getting their health insurance. In his new book “Reinventing American Health Care: How the Affordable Care Act Will Improve Our Terribly Complex, Blatantly Unjust, Outrageously Expensive, Grossly Inefficient, Error Prone System,” Emanuel admits that employers are likely to drop employer health insurance coverage for their workers making President Obama’s “if you like your plan you can keep it” pledge a total lie.

So how many private sector workers will continue to receive coverage from their employers? Emanuel claims the number of workers receiving employer health insurance could fall below 25% by 2025, despite the fines large companies may have to pay if they fail to offer health coverage. Currently, just under 60 percent of private-sector workers currently get employer health insurance. Emanuel admits the change could come when a few big employers, blue-chip companies drop coverage.

Why would they drop employer health insurance coverage if there is an employer mandate? It’s simple- although the law requires companies to offer employer health insurance coverage if they have 50 or more workers the $2,000 penalty per employee may still be less than the cost for the company to offer employer health insurance coverage. In fact, some companies would be able to pay the penalty, give workers a raise and eliminate the hassle of offering coverage, thus forcing workers to the public exchanges.

Emanuel calls shift from employer health insurance a good thing


Emanuel doesn’t see the shift away from employer health insurance as a negative. In fact, he argues that the shift could be a good thing, allowing more consumer choice and limiting the costs. He concluded that “you might put it under positive, unintended consequences.”

He also notes that the current employer health insurance system was almost created by “accident” as workers were given health care benefits instead of wage increases after during World War II. The current system has been largely blamed for limiting choice and accelerating health cost inflation.

What do the politicians think?


Although the democrats may like the idea of a single payer system eventually, the last thing they need right before the midterm elections is any sign that more workers could lose their insurance. In fact, said Jonathan Gruber, an M.I.T. health economist, calls this a “big political problem.”

And although President Obama has left mostly undisturbed the much larger employer-provided insurance market, which currently serves an estimated 149 million people, he has implemented a new tax starting in 2018 which will tax health care plans of some large companies. A move he claimed was necessary to finance his plan and constrain health care costs.

According to Emanuel, this tax, the subsidies offered to middle class workers, and the high cost of offering health insurance which is likely to increase the shift away from employer-provided health care.

Others advisors to the White House, however, disagree with Emanuel claiming that offering healthcare coverage will continue to be an attractive tool to hire the best employees. But others claim the shifts will occur but will be most likely affect retailers and restaurants with heavy concentrations of low-wage workers eligible for public subsidies.
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