When many employers stop offering health insurance to their employees...

[riderinthestorm]

I believe that more than a few employers will find it more cost effective and efficient to simply pay the penalty rather than continue offering health insurance. Since everyone will be mandated to purchase it elsewhere and insurers will be mandated to give it to them, the employers will get out of offering it. Remember no one could have foreseen the end of defined pension benefits even 25 years ago and now its a rare thing as most employers moved to a 401k system. The demise of unions will facilitate this action by employers since no union will remain strong enough to oppose the change for long.

So, with that stipulated, I believe the demand for single payer will ultimately be driven by employers. Why?

Sooner or later they're going to resist paying the $3,000 per person penalty. They will begin to wonder why health insurance was ever coupled with employment and will begin to chafe.

I believe Vermont's example offering a public option will be a shining beacon and other states (and corporations) will see and understand. Most multinational corporations like GM for example are already in favor of single payer because they've seen the cost effectiveness of Japanese companies up close and personal. They know how much this will increase their global competitiveness.

I'd be happy to be proven wrong but I believe in 10 years we will see a real change in attitudes and it will come from the top management - probably the only "trickle down" benefit I'll ever see in my whole life.

[banned from Kos]

1. "professional" companies won't change anything - tech, engineering, etc.

Its the McDonalds and Wal-Marts I wonder about - with legions of hourly employees.

[OrwellwasRight]

3. They don't offer good (Wal-Mart) or any (McDonald's) coverage now.

So workers won't lose anything.

[banned from Kos]

12. But will they be required to pony up that $3000 penalty?

And would that change their stance on providing some modest type coverage?

[SickOfTheOnePct]

19. $3000 per is still cheaper than $6000-$10000 per n/t

[OrwellwasRight]

22. Yes, and 0 (current penalty) is cheaper than $3000.

So why would they drop with a penalty and not without? Nonsensical.

[riderinthestorm]

25. They're not paying 0. They're paying thousands for an employee's policy right now nt

[OrwellwasRight]

33. The penalty right now is zero.

What don't you get about that?

[riderinthestorm]

39. You are confusing "penalty". Corporations are definitely paying right now.

Yes, its not called a "penalty", its called your company health insurance policy. But to the company bottom line: its still an expenditure however you want to label it.

When a company looks at expenditures they are weighing whether that expenditure is worth it. I predict that some (not all, maybe not even a lot at first) will find that the much HIGHER expenditure they are currently paying for an employee health plan won't be worth it.

They will pay the penalty instead.

[OrwellwasRight]

56. YOU are confusing "penalty."

Penalty = the sum to be forfeited if a person does not meet a particular obligation

Right now, the "penalty" that employers pay for NOT providing health insurance is 0, none, zilch, nada, nothing, zero.

The health insurance policy is not the "penalty," it is a product that serves as a fringe benefit that over 60% of employers CHOOSE to provide to their employees, even though there is no "penalty" for not doing so.

AFTER 2014, there will be a penalty (a maximum of $3000 per employee, but in some cases much less) for choosing not to provide that health insurance.

When a company looks at expenditures they are weighing whether that expenditure is worth it, and most who are choosing to provide insurance NOW, with NO penalty, will continue to do so.

So says the CBO.

But CBO says it continues to believe that "most employers will continue to have an economic incentive to offer health insurance to their employees," so it does not expect a dramatic change in employer coverage.

[Chan790]

68. You've clearly missed...

that employers, major employers, real employers of real jobs and not McJobs...are already saying they're going to drop current coverage and pay the penalty because they see this ruling pushing up the cost of the coverage they already offer and the penalty as the most cost-effective option.

It's a few, a trickle now, but in all likelihood riderinthestorm is right...it will take off as employers begin to examine their bottom-line and options. Even if costs remain the same rather than dropping, it makes more sense to pay the penalty than the insurance...and they'll be pushed to follow suit as their competitors do the same.

[Art_from_Ark]

97. It seems like having a per-person penalty

might also give some companies incentive to fire employees and work with a barebones staff.

[OrwellwasRight]

111. If they pay the cost now when there is no penalty for dropping it, then

why drop it when there will be a penalty? Yes, paying the penalty will be cheaper than providing insurance, but today paying nothing is cheaper than providing insurance, and yet they still do --- so they are calculating that for some reason it is in their economic interest to do so. That calculation won't change when the cost of "not providing insurance" rises.

How will the existence of the penalty push up the cost of insurance? That makes no sense.

[Bandit]

71. What would be the incentive if everybody has insurance?

Why would a company offer something that was available to everyone at an affordable rate already? The company could drop the Health Insurance and add a bit more to Salaries as incentive and still come out on top even with the small penalty they will be forced to pay. Within a Decade the penalties will no longer exist and we will be a huge step closer to single payer..

[riderinthestorm]

78. The more pressure that builds, from every front, to enact single payer, the better

Edited to add that negotiating and administering a company health insurance program is a royal pain.

I know there are top administrators who specialize in this but small businesses really struggle (okay so maybe I'm an idiot but if you've ever dealt with the health insurance industry even a little bit then magnify that times x number of employees and you get a sense of the hassle).

I hate having to inform everyone that their rate is going up, every year - its basically a wage reduction since I don't have enough money to pay them more to cover it. Since these folks are like family to me, its very hard.

Getting out from doing this would be a huge relief and I believe that I'm not alone as a company owner.

[OrwellwasRight]

110. Everybody won't have insurance.

Right now, for employer provided insurance, the employer pays a huge chunk of the cost. In some cases, 100%, but more often somewhere between 90 and 50%. To drop that and tell people to go into the exchange, where they will have to pay 100% of it themselves, it is not going to be affordable, and it is going to be a shittier plan as well, and there will be a huge incentive to be the employer who still subsidizes group coverage.

[OrwellwasRight]

35. Employers who don't offer insurance are paying zero.

Employers who DO offer insurance face a penalty of zero for dropping insurance now, and yet they still are choosing to spend all that money and offer it. So why would they stop offering it if the price of not offering went up from 0 to $3000?

And for an employer who currently pays 0 by not offering insurance, he or she may choose to offer it since they have to pay all that money as a penalty anyway and yet can't offer their employees anything to show for it.

So in fact, the result might be the opposite of what you are arguing.

[riderinthestorm]

42. More and more companies are dropping coverage. That's a fact.

More and more companies are hiring 2 part timers to replace a full-time-with-bennies person. That's a fact. Its already happening.

And for the companies that aren't offering it - I'd LOVE to see any policy, ANY policy that has an annual total rate of $3k that's worth anything. People aren't stupid and won't take something that's clearly a scam (which a health insurance policy that only costs $3k total per year would be).

[OrwellwasRight]

52. More and more companies were dropping coverage BEFORE the ACA. That's a fact.

Companies dropping coverage has no causal relation to the ACA. It has existed for years because costs have been rising for years. And sadly, the ACA will do nothing to control costs.

I think you might be being purposely dense. I never said any insurance cost $3,000. If I did, please find the post and quote me.

Here is my argument for about the 10th (and frankly final--because I am getting bored) time:

Right now, today, June 29th, 2012, there is no penalty 9the same as a zero penalty) for any employer who does not offer health insurance coverage. Yet, many employers still offer it. In fact, according to the National Bureau of Economic Research:

Employer-sponsored insurance (ESI) plays a central role in the financing of health care in the U.S. Currently, 162 million Americans have ESI, representing over 60 percent of the non-elderly population. ESI dominates the private insurance market, accounting for 90 percent of the market. ESI not only is an important source of insurance coverage for workers and their families, but also affects individuals' employment decisions, including the choice of whether to work, how many hours to work, and what type of job to hold.

http://www.nber.org/bah/2009no2/w14839.html

Therefore, the employers who choose to offer it now, today, June 29th, 2012, do so because they make the calculation that it is somehow in their economic interest, despite the cost (which, to use your figures, not mine, is $7500). If they dropped the coverage TODAY, they'd pay a penalty of zero per employee. And yet, many employers keep providing it.

In 2014, for employers who either drop coverage or choose not to begin providing it, they will pay a per employee penalty. Again to use your figure, the penalty per employee is $3000 (it is actually not a fixed amount and can vary -- a good chart to explain the penalty can be found here: http://healthreform.kff.org/the-basics/employer-penalty-flowchart.aspx). So, for an employer who WAS paying $7500 per employee, who chose to drop coverage, and ended up paying the max penalty, that employer would face a savings of $4500 per employee. You provide no explanation for your argument that the vast majority of employers who are not dropping coverage now to save $7500 per employee would all of a sudden drop coverage after 2014 to save only $4500 per employee.

Moreover, for employers whose current health insurance cost is zero, again, using your figures, in 2014, they will face a choice, to pay $3000 per employee and get nothing. Or pay a marginal cost of $4500 above the penalty amount, and perhaps get employees who have more longevity, put in more effort, or whatever. Some, facing a cost of $3000 per employee, to buy nothing, will make a calculation that paying more to actually provide the insurance will be worth it in terms of what they get back from employees (most won't, but some will).

Note that my argument has nothing to do with $3000 insurance.

Finally, I note that the CBO and JCT analysis is consistent with the argument presented here (some reduction in employer-based coverage, but not much):

CBO and the staff of the Joint Committee on Taxation (JCT) continue to expect that the Affordable Care Act (ACA)—the health care legislation enacted in March 2010—will lead to a small reduction in the number of people receiving employment-based health insurance. Some observers have expressed surprise that CBO and JCT have not expected a much larger reduction given the expanded eligibility for Medicaid and the subsidies for insurance coverage purchased through health insurance “exchanges” that will result from the ACA. CBO and JCT’s estimates take account of those factors, but they also recognize that the legislation leaves in place some financial incentives and also creates new financial incentives for firms to offer and for many people to obtain health insurance coverage through their employers.

http://cbo.gov/publication/43090

[OrwellwasRight]

21. The penalty will not cause most companies to drop coverage.

A few, yes. But not top tier trying to attract top talent. Those that it does somehow incentivize to drop were most likely offering shitty coverage and workers will be better off getting into the exchange. That's my point.

[littlewolf]

36. I thought McD's had a waiver .... not sure about walmart ....nt

[OrwellwasRight]

57. My point is that not many companies that provide coverage now will drop it.

If the coverage that is dropped is "waiver" coverage, that means it is shitty, and workers are better off being in the exchange. Any waivers that companies get are not forever. They will have to join the system eventually anyway.

And I don't know who McDonald's has a waiver for. Maybe it's different these days, but no one I ever knew who worked at McDonald's ever had insurance of any kind.

[riderinthestorm]

5. Even the best tech companies like Bell Labs, IBM etc. have dropped pension plans

and gone to 401ks. Full disclosure - my dad's a retired Bell Labs geek, my uncle was similar at IBM. They're aghast at the "hideous" benefits offered to new hires at their former employers, the changes are incomprehensible to them as to how anyone could "accept" such paltry offerings.

Never say never....

[coalition_unwilling]

101. Nothing like a 16% 'real' unemployment rate to induce employees to

accept 'hideous' pay and benefits.

[zbdent]

55. you mean with all those Wal-Mart employees

on welfare, because their wages are so low, they qualify? (and are instructed by WM's HR dept on how to get those "benefits" ...)

[Romulox]

80. Absolutely FALSE. "Contract" work is already the norm in several professional fields.

[xmas74]

100. Yep.

I have a friend with a master's-has worked in CADD for years. In 2000 he was doing well for himself-enough that he could support a family, own his home, afford a family vacation to DisneyWorld every year, etc. He had a solid job with a good company.

By 2007 this had all changed. As of now he is on contract work, hopping around from job to job every 3-9 months, depending on length of contract. He's lost the house, fights over finances caused a divorce, has no health insurance, declared bankruptcy. He said he knows he's not the only one in his field to do so. He's now considering getting an associates as an ultrasound tech.

[OrwellwasRight]

2. I disagree.

Employers don't have to offer now -- there is no penalty, so they do it for others reasons (as a recruiting tool, or to keep absenteeism down, or to keep the workforce healthier, whatever). Those reasons will still exist. If they do not offer it, many people may not be able to afford it in the exchange, so they'll have nothing, and the plans in the exchange are likely to be shitty (I know they are not supposed to be, but we all know the difference between group and individual plans, and that ain't changing, ACA or no ACA). So, if they want happy, healthy employees, they will continue to offer coverage. If not, they'll drop coverage. CBO projects that few employers will drop coverage, and I think they are right.

[Iggy]

8. Exactly

the "employers are going to stop providing health care and pay the penalty" is just more reich wing
propaganda/hysteria-- ignore it.

Not only are companies NOT going to do this for the reasons you mentioned, but if you've ever worked
for a company with more than 50 employees (as I have) you'll notice around half of the HR staff works on
insurance issues, the wellness program, etc. dumping health insurance means these people would
be fired. Nope, it's not going to happen.

[riderinthestorm]

14. I'm no "reich winger" newbie, and I'm advocating FOR a path to single payer. nt

[OrwellwasRight]

16. I'm advocating for single payer too.

But saying that all employers are going to drop insurance and pay the penalty is neither likely to happen nor the best path to single payer.

[riderinthestorm]

47. I didn't say "all" employers but some most certainly will

Nor do I think this is the best path to single payer (Bernie Sanders and Vermont offering a public option is the way to go imho).

BUT as more and more employers ARE dropping coverage as we speak - or circumventing it by only hiring part timers - they're already figuring out ways to get around this.

[OrwellwasRight]

48. See? They are dropping it REGARDLESS of the penalty.

There is no penalty now, so your argument that the penalty will make employers drop coverage is disproved. They are dropping it now, with a penalty of zero.

[riderinthestorm]

50. Its not an all or nothing thing. I'm not arguing that it is.

Some are dropping it now because they can't afford to offer it any longer (its expensive to the employer). Some are dropping it now so they can save some bucks before they have to pay the penalty in the next 18 months.

And some will drop it because its cheaper to pay the penalty than to continue paying and administering insurance premiums.

[OrwellwasRight]

53. You are though.

You said that enough will drop it that there will be no choice but to go to single payer. That is a pretty significant amount, since over 60% of employers currently offer it. And you offer no facts to support your position. And you do not address why employers who are choosing not to drop coverage now will make a different choice when their marginal savings will be far less.

[riderinthestorm]

63. I'm not. Its in my very first sentence that I qualify it - I never said "all"

I've always said "some", I even said "more than a few".

Please don't misquote me.

I believe the pressure for single payer will come from many fronts. I believe this will be one of them and I don't see that as a bad thing.

[OrwellwasRight]

119. You said enough would drop it to collapse the employer-provided insurance system.

That is significantly more than "some." Stand by your premise. Of course "some" will always do something. That's because there are always outliers. However, your argument isn't based on outliers, it is based on the collapse of the employer-provided insurance system, which requires far more than outliers.

Meanwhile, you can quibble about words, but you have yet to provide actual proof (after being asked multiple times by other posters as well as me) of why the 60% + of employers who do not drop insurance coverage now, when dropping it is penalty-free, will all of sudden decide it is a better deal to drop coverage when there will be a financial penalty, and they will also lose the recruiting tool and whatever other benefits they are getting for their money now.

[Iggy]

60. So Am I, and the ACA

allows states like Vermont to pursue single payer, which they have already have started on.

other states will follow, once it is demonstrated that 1/3 or more can be saved on health care
costs.

the same thing happened in Canada-- Saskatchewan started, then other provinces followed until
everyone was on board.

[Zalatix]

90. Then you don't know the facts of history, do you? Or mathematics?

http://online.wsj.com/article/SB10001424052702304811304577367833267990666.html

The committee reported that Southwest Airlines LUV +0.11% said in its employee magazine of June 2010 that it expected the law to increase its costs. In an internal presentation made in April 2010, Southwest said that under the new system it could expect to pay $414 million a year to provide health care for workers, or drop coverage entirely and instead pay $111 million in penalties.

http://www.usatoday.com/money/industries/health/2010-10-07-healthlaw07_ST_N.htm

Nearly a million workers won't get a consumer protection in the U.S. health reform law meant to cap insurance costs because the government exempted their employers.
Thirty companies and organizations, including McDonald's (MCD) and Jack in the Box (JACK), won't be required to raise the minimum annual benefit included in low-cost health plans, which are often used to cover part-time or low-wage employees.

The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn't lose coverage from employers who might choose instead to drop health insurance altogether.

Without waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013 and unlimited in 2014.

When a company is faced with rising health care costs and DROPPING health care and paying the fine is less expensive than paying for health care, you get exactly what McDonalds and 29 other major corporations did: they threaten Obama and get him to give them waivers.

In other words - what you're saying can't happen, ALREADY HAS.

[Iggy]

91. WHAT A LOAD

if this is Southwest Airline's "philosophy" and/or it comes out their executives are some sort of anti
Obama dickheads-- there will be massive blowback/bad PR because of this.

remember what happened when B of A announced bogus new fees? within hours the internets exploded
with protest-- and B of A backed off.

BOYCOTTS work, when people are smart/ballsy enough to do it.

regardless, I doubt numerous large corporations are going to do what southwest is doing-- white collar workers
are used to these benefits. companies that just eliminate these benefits without offering other
compensation will find themselves losing valuable talent.

[riderinthestorm]

9. It will be cheaper to pay the penalty.

I pay 50% of my employees health insurance costs, which amounts to about $3500/employee. Plus I have the aggravation, hassle and time (TIME!) spent administering it.

The penalty is cheaper, easier. I can't stop coverage at my place (my husband has a serious PEC) but other firms aren't going to be so emotionally invested.

[OrwellwasRight]

15. Yes, and right now it is cheaper to offer nothing.

Did you even read my post? Employers do not offer health insurance now except that they think it is worth the money. Why would they drop it to pay a penalty when they don't drop it now when there is no penalty. It makes no sense.

[OrwellwasRight]

18. How is a penalty cheaper than 0? nt

[riderinthestorm]

23. They're not paying 0. They're paying thousands for an employee's policy

Each employee already costs that company some thousands of dollars for that particular policy - in my case it averages $7500/employee per year. I pay half of that. Some firms pay a greater percentage, some firms pay less. But all of them pay something in the order of many thousands of dollars per year to offer you health insurance.

A $3k penalty will be cheaper and easier than the current hassle, mess and craziness. Its a "fixed" cost that won't go up next year (like their policy WILL certainly increase).

[OrwellwasRight]

32. Yes, they currently pay more for insurance, and they could drop it without a penalty.

So they could drop it for 0 -- right now. Today. They can drop your insurance coverage, but they CHOOSE to spend the money, even with no penalty at all. If they do not drop it when the penalty is 0, they will not drop it when the penalty is $3000. The same things that make them choose to offer it now, when they do not have to, will still apply in 2014 (again, attracting top talent, making employees healthier by providing high quality care, whatever). What is it you don't understand about this?

[TheKentuckian]

37. Ok, the disconnect in this thread is simple.

Why would employers under ZERO obligation to provide insurance with exactly a ZERO penalty all the sudden start dropping because they now must pay a penalty no matter how much cheaper and easier?

They could drop today at NO COST. They have no obligation!

Now, that said I'm praying they do because as things currently stand that is the only way to really move the needle and get folks some consumer power at least but in application the argument seems very weak logically unless you've skipped some crucial piece.

[riderinthestorm]

43. They are dropping coverage - more and more companies are doing just that.

I predict even more will snowball in the next 18 months. They're already looking to replace full timers with part timers (voila! no insurance requirement).

There will now be an "out", a place for their employees to get coverage themselves. Any company with a vestige of humanity that was doing it altruistically will be breathing a sigh of relief and drop coverage since their employees aren't going to be hanging in the wind (including and perhaps more importantly the owners).

You can read Business Insider, the Economist and other trade journals - this convo has been happening long before SCOTUS came down with their decision. Many companies have been making plans for a year or more.

[Chan790]

73. Because some have already said they will.

Their motives make fuck-all sense to me as well...but they said it and I expect they're going to do it. This will put pressure on their competitors to do the same thing.

Not only prayer, I do wonder if this was intent-design: a bill written to provoke a response to sever employ from healthcare to pave the way for a future solution.

[Iggy]

92. Again, this is coming from

anti Obama buffoons.

they assume just because they are venal and selfish that ALL companies are as well. it's just not the case.

tell ya what- come talk to me when the billionaire Koch brothers DROP the health care plans for the
significant number of companies they own-- or Warren Buffett.

[riderinthestorm]

93. Why are you so invested in maintaining the status quo? Healthcare tied to employment is so great?

Why would anyone think this is a good thing, or a progressive thing? You appear to be wanting to keep Americans tethered to their jobs for health care (insurance).

I'm not going to alert on your gratuitous slam, I'll just let it stand on its own, but honestly I don't consider anybody here to be an anti-Obama "buffoon" and I've been here a hell of a lot longer than you. I (and others) have been pretty clear that my goal in raising this is to have a conversation about whether this will potentially be another pressure point towards moving us closer to single payer. Which is a goal I believe most progressives want.

The people who appear to want to keep the old insurance system enshrined for Americans are DNC corporatists and... Rethugs. Which are you?


(and FWIW, I actually do believe that many if not most companies are venal and selfish).

[Iggy]

96. Changing the Subject

I'm not supporting the status quo.

I'm simply calling BulllS*** on reich wing hysteria: _All_ companies are going to drop their health care
plans bcause it's cheaper to pay the penalty.

what a Load.

and keep in mind we're working with a flawed system (for profit) from the get go.

as long as doctors and hospitals think they "deserve" to make millions of dollars on health care, we're
going nowhere.

[riderinthestorm]

102. I'm not changing the subject and I've never said "all" companies. Please try to read for accuracy nt

[lumberjack_jeff]

76. If you dropped it today, you'd save $3500. If you dropped it after 2014, you'll save $500.

Why do you offer it today? There will be less reason to drop it in 2014, except perhaps that the employees could get it cheaper on the exchange. The penalty is a non-issue.

[riderinthestorm]

83. Personally? We can't drop it since my husband has Stage IV, Grade IV lymphoma

He's just passing his 4 year remission mark but it's just too serious a PEC to go without or risk anything.

So we pay.

Others will make their own moral and monetary calculations and come to a different conclusion I believe.

[lumberjack_jeff]

84. If your experience is the exception rather than the rule

then why does any employer offer it?

There's no penalty to employers who drop insurance today.

[riderinthestorm]

86. They are dropping it. More and more. Its happening as we speak

Many of the business trade journals I read have all been talking about this and how companies have been making their plans for what they were going to do when the ruling came down.

Like I said, not everyone will do it. But I believe enough will that it may provide pressure to change the system. Its going to take a LOT of pressure from many angles to get this thing done. As more companies do this, others will take note of the fall-out and decide whether they can do it too. Businesses tend to snowball on stuff like this (I used the defined pension benefit vs 401ks analogy downthread but it applies here - an old benefit stand-by that was considered sacrosanct disappeared within a decade.) With health insurance options out there that won't be tied to employment, it will be examined and more than a few will seize upon it.

[TheKentuckian]

95. Why would they be offering coverage now?

The math isn't rational, there is more to save now by not offering insurance than there will be moving forward.

The incentive is greater today, why not take advantage?

[Autumn]

38. A man on the local news said he would probably go to

just part time workers. So I thought that must mean no penalty if your workers are part time, and I assume no insurance either.

[lumberjack_jeff]

74. You could cut your employees compensation by $3500 without ramifications? n/t

[riderinthestorm]

85. I dunno Jeff, do you think employers haven't already been doing that?

I believe they have. New hires don't get the bennies that the old employees have gotten so its phased out slowly... there's all sorts of ways to eliminate it.

I also believe that some firms don't give a shit about employee ramifications, especially in this economy. Its an employer's economy and many workers are getting screwed (furlough days etc).


Wish it weren't so but that's how I see it.

[lumberjack_jeff]

87. I know they do and are.

The point I and others are making is that the $3000 penalty will slow that process, not accelerate it.

[Zalatix]

120. McDonalds and 29 other big companies threatened to do just that.

They forced Obama to give them some bullshit waivers.

[OrwellwasRight]

121. McDonald's doesn't offer real health coverage.

They threatened to drop their half-assed plans if they did not get a waiver--and they don't offer the coverage to all employees anyway. Frankly those workers that do get it would be better off in the exchange where the coverage won't be so crappy even though it won't be as good as real health plans. The OP wasn't about threats anyway, it was about how MORE companies will drop coverage as soon as the penalty kicks in (even though more than 60% of employers offer coverage now with no penalty at all for not doing so). It's a false premise with no evidence. And a few companies trying to skirt the rules and continue to offer less than the minimum acceptable coverage isn't the same proposition at all.

[Zalatix]

122. Southwest has been mulling dropping coverage for its employees.

It stands to save $300 million in the process.

http://online.wsj.com/article/SB10001424052702304811304577367833267990666.html

[OrwellwasRight]

123. Sure. I think everyone here agrees with that point.

And anecdotal evidence does not represent the "collapse of employer-absed insurance." For MOST companies, it will be an easier decision to decide to keep providing insurance AFTER there is a large cost to deciding not to do so (as opposed to now, when there is NO cost to deciding to do so). If you have proof otherwise, rather than anecdotal evidence, I'll be convinced. Until then, I'll believe common sense.

[Motown_Johnny]

4. We will simply increase the penalty

[riderinthestorm]

7. Remember its been defined now as a "tax" - raising "taxes" will be verrrry difficult imho. nt

[Motown_Johnny]

72. (R)s love raising taxes on the poor, this will be easy

It is the rich people who they protect.

[kenny blankenship]

104. Increasing penalties, increasing taxes, increasing premiums and increasing bankruptcies

Ever increasing shittiness of care and outcoomes for the majority will be the legacy of Obamacare - before it's eventually ripped out by the roots because of popular outrage.

[lolly]

6. Single payer should clearly be the ultimate goal

But I fail to see why employers who currently offer health insurance would stop.

They will still get tax write offs for it.

They're paying for it now without the threat of a penalty--why would they stop and elect to pay the penalty and lose the tax credits?

[riderinthestorm]

10. It will be cheaper to pay the penalty. nt

[SickOfTheOnePct]

13. Because it's much cheaper to not offer it at all

They offer it now as a recruiting and retention tool, and many still will. But paying $3000 per employee v. $10,000 per employee, with the knowledge that the employee can buy it on their own, is a mighty tempting offer.

[OrwellwasRight]

24. +1 nt

[PoliticAverse]

11. It would be nice if insurance were separated from employment...

but it would require a change in the tax laws so you don't have to pay taxes on income you
use to purchase a policy.

[Ruby the Liberal]

17. "insurers will be mandated to give it to them"

Still my sticking point. Yes, they can't block for preexisting conditions, but unless I missed it, they can have exclusion periods (saw a policy the other day that was 18 months) and there are no cap controls where they can charge whatever they want.

Insurance should NEVER have been tied to employment, but if one of your employees is say, diabetic, dropping their coverage could be hanging them out like raw meat to the wolves.

[riderinthestorm]

28. Oh, I completely agree. 110% agree but the bean counters will win on this I predict

Morality and compassion be damned....

[OrwellwasRight]

29. Not exactly.

There will be community rating. So, no, they won't be able to charge an unlimited amount for pre-existing conditions. People will pay the same as each other. I don't think exclusion periods will be allowed either, but the law didn't say that there can't be open enrollment periods to prevent people from waiting to buy till they have been diagnosed with cancer.

[Ruby the Liberal]

40. Actually, the law does provide for enrollment windows.

October 2013 - Feb 2014 for the first year, and October to Mid-December going forward. This allows people to enroll or change plans annually while preventing last minute signups.

On exclusion periods, I would LOVE to see whatever you have found that says they will not be allowed, as my research is showing that they are not addressed at all, meaning that will still happen as it is happening today.

Would also appreciate any information you have on the community rating being across the board for all policies (not just the exchanges or the penalty/tax basis) as I have not seen where that is going to be globally applied outside of those two areas.

[OrwellwasRight]

54. Virtually all insurance will be sold inside the exchanges if not-employer sponsored.

That is the point of the exchanges.

Currently, federal law does not place any limits on the ways that insurers set their premium rates. However, beginning January 1, 2014, insurance companies must meet minimum premium rating rules for health plans for individuals and small businesses. Health plans will be allowed to adjust premiums based only on the following factors:

Individual vs. family enrollment (i.e., individual + spouse, individual + dependent(s), etc.)
Geographic area
Age (but cannot vary by more than three times among adults)
Tobacco use (the rate cannot vary by more than 1.5 to 1)

Other factors that insurers traditionally use to charge higher premiums, such as health status, use of health services and gender, will no longer be allowed under the ACA. The rating rules in the ACA set a floor, so states can retain or enact a tougher standard than federal law.

(emphasis added)

http://101.communitycatalyst.org/aca_provisions/setting_premiums (see also page 46 of the ACA, consolidated law, dated June 9, 2010)

From the ACA itself:

‘‘SEC. 2704 [42 U.S.C. 300gg–3]. PROHIBITION OF PREEXISTING CONDITION
EXCLUSIONS OR OTHER DISCRIMINATION BASED
ON HEALTH STATUS.
‘‘(a) IN GENERAL.—A group health plan and a health insurance
issuer offering group or individual health insurance coverage may
not impose any preexisting condition exclusion with respect to such
plan or coverage.’’;

Page 45 of the consolidated law, dated June 9, 2010.

I believe "no exclusion" means "no exclusions". Otherwise, it would say "except for temporary exclusions for new customers" or some such nonsense.

And, yes, I said there can be enrollment periods. This will cut down on abuse (like buying insurance on the way to the hospital) and keep costs down for us all.

[Ruby the Liberal]

65. Great link!

Thanks for that - I bookmarked it. This is a good resource to share with people who aren't familiar with how health insurance works - they did a great job in laying out some complex concepts.

I like your interpretation of "no exclusion is not except for temporary exclusion" but still not seeing it as clear as I would like. Insurance has moved from 30-90 day waiting periods to 12-24 months in recent years. I just don't see them not gaming the system to keep that practice (potentially lowered rates for the first year - or similar).

I am one of those who will be shopping the exchanges as I am not on an employer plan, and quite honestly, can't wait to see what they look like next fall. Watching Vermont carefully as well.

[OrwellwasRight]

112. Definitely --

certainly if I were an attorney for a health insurance company I would argue that "temporary exclusions" weren't covered by the language, but I think the stringer argument is that the plain language of the statute means what it says "no exclusions." We'll see how ti gets interpreted.

And yes, love the community catalyst.

Kaiser Family Foundation has done some great work on this law since the get go.

[Ruby the Liberal]

113. I don't trust them.

If they could turn a profit with some of these provisions today, they would already be doing it and cornering the market everywhere they do business.

Asking them to completely change their business model to accommodate what should be a single payer system (while protecting their shareholder's interests and C-level bonuses) is just begging for the system to be gamed.

[OrwellwasRight]

114. Actually Kaiser Family Foundation

is a totally independent entity from Kaiser Permanente Healthcare.

They were both started by the Kaiser steel family, so they share the Kaiser name, but other than the name, there is no interconnection. KFF functions as a non-profit health news and think tank service. It does not steer business to Kaiser Permanente Healthcare, nor does its work try to unfairly champion the KP model (i.e., it is NOT the American Petroleum Institute or the Corn Growers' Council).

It is a respected think tank, for what it is worth. Of course, you are free to distrust it if you like, but I hope this is a little bit of useful info.

[Ruby the Liberal]

115. Sorry - wasn't talking about KFF

I know who they are. I meant the Insurance industry. I don't trust *them*.

Games are already beginning too. First salvo is that if they can't get the age max raised from 3x to 5x, they are going to start a campaign that insurance will be too expensive for young people. That hit the news today.

ie - rather than rating 58 year olds at 3x a 28 year old base, they will rate 58 year olds as a base and then divide by 3 and then claim the system is broken because 28 year olds can't afford 1/3 of the 58 year old's rating.

Lovely, no?

[OrwellwasRight]

118. Oh, I agree 100%

This is the biggest gift they have ever received. A captive market where everyone has to participate (more or less). And still that isn't good enough for them. They need to make MORE money.

It think it is criminal that "healthcare" is a for-profit industry anyway. But that's a discussion for another thread.

[LiberalFighter]

20. Only when the US Chamber of Commerce is destroyed.

They don't support Single Payer or any form of national insurance.

[Ruby the Liberal]

41. These same fools were ALL up in arms yesterday

about the tax on small businesses that don't offer insurance now.

They need to think twice about this. Damn hypocrites.

[Chan790]

81. Some of us have that objective.

We started with ALEC because ALEC was low-hanging fruit...it was going to be easy to destroy because its' major asset was secrecy and anonymity. ALEC is terminal at this point it seems.

Do you think those of us who have been harrying ALEC for 3,4,5,10 years are intending to go home and sit on that victory? No. At least I'm not...taking the USCoC apart was always part of the plan. No B2B corporate national organization...they can start them but we're going to keep killing them. It might take us a while but we're the barbarians at their gates...battering rams are slow work but all gates fall to them eventually if you keep beating on them.

[RainDog]

26. single pay is the only way to fix this broken system

since Republicans are such worthless humans - it will happen this way.

[DeeJay]

27. I think you are correct n/t

[Honeycombe8]

30. I don't see why having to pay a penalty would have any effect on employr offering ins. if he's

already offering it. The penalty simply won't apply to that employer.

The employer doesn't CARE whether employees have ins. They offer it only because they have to to compete with other employers, to get new hires. So a penalty won't affect that.

You could be right that employers use that as an excuse to drop insurance coverage, AFTER COLLUDING WITH OTHER EMPLOYERS TO MAKE SURE MOST OF THEM ARE ON BOARD WITH THAT.

We'll see. I think you are right that it could be used by teh govt as an excuse to get more involved with subsidies or single payer.

As a moderate who didn't want to push for the public option before, I would definitely be willing to push hard for that after Obama gets re-elected.

[riderinthestorm]

44. Oh I think they'll collude. I have no doubt of that. nt

[LARED]

31. I think the economics with eventually force a two tier heath insurance system

Eventually there will be a lower cost insurance (single payer) with minimum benefits that everyone will get. Company that employ professionals and other high skills will wind up offering a bolt-on health insurance plan in addytion to the single payer in order to attact talent.

[riderinthestorm]

45. I agree and its what many, many DUers feared in the HCR negotiation phases.

Those battles were ferocious and epic. I'm beginning to think that some DUers were very prescient.

[SickOfTheOnePct]

51. I agree

I've moved more and more toward a single payer system as being the best answer, but I'm still not on board with the idea of not allowing people to buy their own insurance or allowing employers to provide it, if they choose to.

It wouldn't exempt them from paying the tax to support single payer, but if they don't want to utilize it, who cares?

[Ruby the Liberal]

66. I believe Australia does this now.

Everyone is covered, but there are 'premium' plans that you can buy. If you are on a premium plan, your benefits are things like a single hospital room as opposed to a double (or ward).

I read about their benefits some years ago and thought that would be a great model to look into. Everyone is covered and the entitled class gets to buy their way into whatever Cadillac plan they can't live without.

[rustydog]

34. If you have 50 or fewer employees, your employee health is tax deductible...

not a bad incentive in my opinion.
My inlaws insured their two employees for years (store now closed due to retirement).
This crap about small business will be crippled by healthcare law is a bunch of bull shit. If your business if 4 people, you, your wife and two help...THAT is small fucking business andinsuring their staff did not cripple them.

do you know what else is listed as "small businesses" do your research...Maddow did an excellent show on it a ways back...think major corporations, big oil, defense....

[riderinthestorm]

46. I am a small business owner and operator. I live this daily.

I speak to many, many others in my profession on a regular basis.

I agree that small businesses will not be crippled by this. Anyone making that claim is full of shit (and trust me, in my biz, I know shit).

For some the tax deduction is relevant, and for others not so much. It will depend. My OP is about those that come to the cold calculation and decide its an expenditure they can drop.

Cold calculus, not mom and pop for sure.

[FarCenter]

49. Currently health insurance is a big plus in attracting and retaining employees.

Employees generally value employer provided health insurance highly because it is issued to all employees, and they won't be dropped, etc.

Once the private market and insurance exchanges are required to issue without regard to prior conditions, the value to the employer of providing health insurance drops significantly.

Smaller employers are likely to drop out when one of their employees has an expensive health problem and the employers rates skyrocket.

[ChazII]

58. Sen Obama at 2009 SEIU conference

http://images1.americanprogress.org/il80web20037/healthforum/7_obama.mp4

First, I will admit I did not listen to the entire question/answer session. If this is old news than please accept my apology.

Then presidential candidate sat with folks from SEIU and gave his views about health care. About ten minutes into the interview he gives his views on employers and how they will work with in his plan for health care.

There is one young woman who poses a question and then the interview asks Sen. Obama,"Where is your thinking on the employer mandate?&quot paraphrasing here)

His response, while not directly addressing the question in this post, does give us an idea where he envisioned the employer.

[mzteris]

59. Interesting thing happened today

We got our renewal contract from our insurance co. All the premiums are going DOWN.

Why do you think that is?

[TNLib]

61. I think so as well

I think it's the first steps in universal healthcare. We'll get there but it might take awhile.

[quaker bill]

62. It already is even cheaper not to pay for insurance

Without the penalty, businesses would save the entire cost. With the penalty they will save less. They could have done it at any time and saved substantially more.

Businesses are under no obligation at all to provide this benefit to anyone currently.

In 2014 those who are providing insurance can continue to do so at no additional expense due to this law.

In 2014 those who already provide no insurance benefit will have a choice, provide a benefit or pay a tax penalty. Some will choose to be better competitors for employees in the marketplace by providing the benefit. The rest will pay more taxes


Your argument makes no financial sense at all. Employers who voluntarily provide benefits do not do it to save money, as it is always cheaper to not provide benefits. This law will make it somewhat less cheaper to not provide benefits. It will still be cheaper, but less
so.

If you did not see the end of the defined benefit pension coming with the invention of the 401K, then you weren't paying much attention.

Single payer will come about because some states will try it, and it will work and be far less expensive. Once this is proven employers who provide benefits will demand it to reduce costs.

[riderinthestorm]

64. I agree with most of your post except...

that I believe there will be more companies that will drop health insurance coverage faster than they may have been planning.

Its already happening. This just may accelerate it and that will put even more pressure on states to create a public option.

I think the pressure for single payer will come from many fronts: Vermont's example will be very compelling but I believe that the corporations de-coupling health insurance from employment will be another. And I don't think that's a bad thing. Its long overdue and a necessary step for us to get out from the present health care insurance monstrosity.

My analogy with the defined pension benefit vs 401k was simply that many people could never envision such an entrenched bennie going by the wayside, to be replaced by something else. It was a radically different mind-set in how retirement benefits were handled. I believe health care will require a similar attitude shift - we must de-couple health insurance from employment attitudinally to help push us towards a better system.

[quaker bill]

69. No reason to drop coverage in the law

You save less money dropping coverage under ACA than you would save without it. This equals less reasons ($) to drop coverage. It may however increase employer offered coverage. If it is going to cost $3000 in taxes to not offer coverage for an individual employee, and only $4000 to provide it, employers may decide the extra $1000 is a price worth paying for an advantage on the recruiting front, and gaining more loyalty from experienced workers....

Business is a funny critter like that.

The only purpose of the 401K was to absolve corporations of the responsibility for long term retirement benefits. There was never any other purpose from day 1. They took very predictable advantage of that.

[riderinthestorm]

75. I'd like to believe you can find any kind of coverage for $4k but if there is, I don't know it

I mean quality health care coverage, not something like dental insurance.

As I've said upthread, I think the pressure to change our current system will have to come from many fronts and big business will have to be onboard. Some of the biggies (like GM) already are pushing for single payer because they've seen how much more competitive they can be if they don't have to carry health insurance for their employees. The change we want may come faster the more companies de-couple health insurance from employment.

I'd like to see that, sooner than later! Peace!

[quaker bill]

98. The group policy at my office

in the managed care option runs in the range of 4K to 5K for individual coverage. It is less than $1.00 an hour more than the penalty for each staff member. Businesses will pay $1.00 an hour more to get and retain good people, they would be nuts not to, because retaining good folks will earn you well more than the additional pay.

[riderinthestorm]

103. What insurance company and what are the specifics? nt

[quaker bill]

116. BCBS

managed care (HMO) with a low deductible (individual only - not family coverage). The $10,000 deductible "catastrophic" plan is even less. This is OK if you have $10,000 laying about, but most folks attempting to shave $ off of payroll premium deductions don't have $10,000 laying around.

Personally, I went with the "cheap" plan 10 years ago, an "in network PPO", which after many benefit cuts is now the most expensive option available. It is pretty good as long as you don't get sick in the wrong way or see the wrong Doctor about it. The total family package for me runs north of 10K. (my employer does an 80/20 split on premiums)

Insurance premiums are out of control. One reason for this is the quantity of uncompensated care which is cost shifted onto those with insurance. There are many other reasons as well. This reform is only the first bite at the apple.

[Romulox]

79. I'd wager the majority of private American employers no longer provide health insurance. So what's

your point?

[quaker bill]

88. Then they have nothing to drop

and the law will have only the effect of imposing a new tax, if they have more than 50 employees.

The OP indicated that employers would be encouraged to drop coverage they are currently providing. I don't think so. Those who want to drop it already have.

[lumberjack_jeff]

82. Employers do provide the benefit to save money.

An employee who needs 10% of their gross salary to purchase medical insurance on the individual market will need a salary 15% larger to be able to afford it.

An employer who offers this medical insurance as a benefit pays less because of group rates, plus they don't pay SS taxes on it, plus the employee doesn't pay tax on it. Net wages to the employee being the same, labor costs are less for the employer who offers a benefit package.

[quaker bill]

89. And they won't stop because of a tax they don't have to pay.

[NutmegYankee]

67. I disagree - There was no penalty before.

A business that didn't care could just end their program and not suffer any consequences. In the end, if a company wants good employees, it will keep it's insurance plans.

[Romulox]

77. I agree with all of your post, save the part about Single Payer. Single Payer is impossible, now.

Insurers have written themselves into the Federal law MANDATORY for every man woman and child.

They will use all of that sweet, sweet lucre to make sure no politician ever votes to take away their monopoly. Book it.

[rustydog]

94. This makes absolutely no sense...If an employer is paying for insurance or the gateway for employees

to get insurance...that is an excellent recruiting tool. Why would they do away with a draw, a benefit? Makes absolutely no sense.

If they dropped insurance they and all of us will still be paying for the healthcare of the un and underinsured in this country.
Makes no sense at all.

[4th law of robotics]

99. "They will begin to wonder why health insurance was ever coupled with employment"

WWII relic when wages were frozen by the feds. You would compete for better workers by offering them better benefits since you couldn't offer them more money directly.

[RKP5637]

105. IMO employer offered health insurance will be a thing of the past. To my knowledge

the only reason it even came about was due to unions, and as an enticement for salaried employees to go with a company. And the belief by some corps. it would lead to a healthy work force. Today, if not well, some corps. would prefer to just kick one out the door.

Exec. mgmt. early on had health insurance and it was extended downward. I recall when hiring on years ago that was an incentive given, as well as retirement benefits. All of that is going away these days, in fact, many corporations would like to have everyone on piece pay, on demand as needed, and that's it, no other attached strings.

[Ruby the Liberal]

107. Actually, it was - the WWII post wage freezes

Companies started adding pension/health benefits to attract talent because they couldn't raise wages.

[RKP5637]

109. Thanks for adding this!!!

[patrice]

106. Do you think many executives & their favorites get FREE hc policies in the status quo, offered by

the HC Ins Cos as an inducement to choose them for their business?

So, it won't just be penalties, it's also going to be loss of those free policies for themselves and as a recruiting chip for other executives who will obediently play-along-to-get-along with and for the enterprise's creditors.

[riderinthestorm]

108. I don't have the answer to that. I'm not sure anyone does

However since health care insurance for the upper execs will now be easily purchased on an exchange, its quite possible the Board of Directors will go that route. They will pay for the individual policies for "those that matter" and let the rest go. Before the CEO would have been motivated to keep the group policy because his kid had epilepsy (or some other chronic catastrophic health issue) that would have cost him millions to caretake without insurance. So the upper execs needed a group policy in place as much as any employee.

But now the BOD can simply buy that policy for that guy. The insurance companies are mandated to sell it to them regardless of daughter's epilepsy. The company still comes out saving millions because they aren't paying for everyone, just the top elite.

My company is very small so perhaps that's why I've never been offered a freebie policy to entice me to use a particular insurance company (and my husband has a very serious PEC). But honestly, I've never heard of the practice of upper management getting free health insurance by a health insurance company. Typically afaik the upper management would get their entire policy covered by their own company as a "perk" (while the peons pay some other percentage of the policy ranging from 10 - 100%). Its possible I'm sure, I've just never heard of it.

[Marrah_G]

117. Here in MA many will not hire fulltime anymore

They just hire a couple people part time and avoid having to give them health insurance.

[lauraperkins]

124. health insurance benefits?

Sometimes, it's not about the health benefits or the penalties. The companies become larger with their policies and how their benefits will attract the skills. Big companies should offer the health insurance and other allowances and do not think about a small size of penalty.