Calif. Employers Weigh Health Insurance Options
|By Tom Kisken, Ventura County Star, Calif.|
|McClatchy-Tribune Information Services|
The online insurance exchange, the marketplace that is a cornerstone of federal health care reform, starts
The fear, pushed by premium prices expected to rise higher and faster, is that employers will decide they can save money by dropping their insurance and absorbing the
But they are intrigued by a provision of the law that means they would be exempt from penalties for their first 30 employees. If they dropped their insurance and sent employees to the new insurance market -- the health benefit exchange -- they would have to pay fines for only 50 of their workers.
"We do have to take a look at different options," said the company's human resources director,
There will be sticker shock come
But if employers drop coverage, they'll have to pay the fines. They'll lose the tax write-off that comes with providing insurance. An employee who doesn't qualify for subsidies could end up paying more because their premiums won't be sheltered from taxes.
It means workers will expect more money to cover the dropped benefit.
"He's going to go back to his employer and say I need a raise. I can't afford my premium," Rosen said. "It's very, very shortsighted for an employer to drop that coverage. It very well may cost them more money in the long run. Number two, it's just going to alienate their employees."
Some companies are considering other options.
Other employers are limiting their work weeks to 29 hours so workers will be defined as part time. Some companies are considering offering increased pay to help their employees shoulder the burden of insurance.
"I have heard some employers say 'Can I just drop my health insurance and just give them
Carter thinks that cost calculations may show many employers that they could save money by not offering insurance.
But she also thinks the vast majority of employers will decide to keep their coverage, partly because they compete for workers with other businesses. Providing insurance allows them to protect and retain their employees.
"Employers are wary of just dumping their employees on the exchange for fear it will be a mess," she said.
Other advisers cite tax advantages and penalties that include a fine of
"I'm sure that some employers will decide to drop coverage this year," said
If large companies save money by dropping insurance, it won't be much, said
"You can't measure it in strict monetary terms," he said, noting that opting out is not an option at his company. "Morale is important. Security is important. How do you put a price on that?"
California Retail Systems in
"It all depends on cost," said
The exchange includes an arm aimed at small businesses. As of
If employers are confused about the options, so are their employees.
What she does know is that she was paying
"If it doubles again, I'm probably not going to be able to afford health care. It's ridiculous," she said, offering an option other than the Affordable Care Act. "Just don't get sick."
Paying the penalty
Businesses with 50 or more full-time equivalent employees will face fines for not providing coverage.
Those fines kick in if one full-time employee receives government subsidized care on the exchange. Subsidies start for people who make up to 400 percent of the federal poverty level, meaning
Penalties include a
If a company offers a plan that doesn't meet government standards, it faces a
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