Opting Out of Coverage Seen Creating Employee Backlash

[Purveyor]

By Alex Nussbaum & Alex Wayne - Dec 5, 2012 12:01 AM ET

Maggie Wilderotter, chief executive officer at cable, Internet and phone provider Frontier Communications Corp. (FTR) says it’s her “fiduciary responsibility” to study ending medical benefits long provided by her company.

“Frontier, like a lot of companies, is likely to at least consider dropping health-care benefits” in 2014, she said.

As President Barack Obama presses ahead with plans to broaden insurance coverage, many U.S. executives say his health- care law has them rethinking their options. Starting in 2014, the law’s $2,000 fine for not offering coverage appears to be far less than what most businesses pay for benefits.

In the end, though, companies will probably find compelling reasons to continue providing health coverage. Among them: Employers value coverage as a tool for recruiting and keeping workers healthy and also fear a backlash, especially among higher earners who might have to pay far more for their insurance than they do now, said Tracy Watts, a partner at Washington-based benefits consultant Mercer Inc. Employees might spend as much as $2,000 a month more in the law’s new online exchanges, she said.

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http://www.bloomberg.com/news/2012-12-05/opting-out-of-coverage-seen-creating-employee-backlash.html

[JustAnotherGen]

1. Thank God

I got 'sold' to Global Crossing back in the late 1990's. Even regardless of how that Glotanic Sunk - I probably would have become a Frontier lifer. Love us or hate us because of the Verizon Communications union issues (landline, FIOS stuff) - wireless is not hearing any of this kind of nonsense being spouted by good old Maggie there.

[JustAnotherGen]

2. Another piece

And employees told they’re losing coverage are likely to demand some of it back through cash or other perks, said Randall Abbott, a senior consultant at Towers Watson & Co. (TW), a New York-based human resources consultant. While health benefits are tax-free, wages aren’t, he said.

Very common in Telecom to have your health care benes listed as part of your OVERALL compensation. This is a left over from the tech bubble/boom in the mid to late 90's. It's how big companies drew talent from upstarts/pre IPOS (it's what drew me away from a small business oriented voip pbx provider in 2006).

So it's not just health insurance benes.

It's actually a drop in salary.