Why do employers continue to pay for health insurance?

[Swede Atlanta]

43. I can definitely see the possibility of a gradual reduction in employer-sponsored health insurance..

(1) The employer may drop their plan and simply pay employees extra or give them a health insurance allowance to obtain insurance through the exchanges. This is probably a win-win especially for a small company. Employees might be able to sure less expensive coverage through an exchange than the company can based on their limited number of insured. I don't really understand if the exchanges can also be used by companies.

This only works when the employer has a sense of loyalty to their employees. This company may well fall below the 50 FT employees to be subject to the requirement.

(2) The employer may drop their plan altogether, pay the penalty and walk away. This option may be beneficial to companies that require low-skilled, fungible workers.

(3) Companies that require highly-skilled, highly-trained employees will be the last to abandon ship. They see salary and benefits as a continuum that attract and retain good employees.

But until this plays out in the market, we will not know.