Employers to Cancel Plans for Millions, Shift Costs to Workers

As the fallout continues over the cancellation notices sent to millions of people covered by health plans in the individual insurance market, it is becoming clear that millions more workers and their families are expected to lose their employer-based coverage as the Affordable Care Act (ACA) is implemented.

According to the Congressional Budget Office (CBO), 156 million Americans — more than half the population — currently receive employer-sponsored health insurance. By 2016, the CBO projects that 6 million fewer people will receive employer-based health insurance compared to 2013.

Other business surveys place the number losing coverage much higher. A recent survey of 400 mid-size firms by the US Chamber of Commerce and the International Franchise Association found that 28% planned to drop their coverage due to the ACA.

In tandem with the legislation commonly known as Obamacare, a seismic shift is taking place in the employer-sponsored health care market, the means by which the majority of Americans who are not insured under a government-sponsored program like Medicare or Medicaid receive coverage. For those workers who have not seen their coverage canceled outright, companies are already shifting greater costs for coverage to their employees.

Workers and their families who are dropped from employer coverage will be forced to purchase coverage on the Obamacare exchanges. Under the so-called individual mandate of the health care law, workers without some form of insurance must purchase coverage from private insurers on the insurance exchanges set up under the ACA, or pay a penalty.

The debacle at the HealthCare.gov web site, where consumers can shop for coverage, may actually be temporarily delaying some employers from terminating health coverage for their workers. When and if the technical difficulties are resolved at the federal site, more companies may opt to dump their workers onto the Obamacare exchange.

Beginning in 2015, the ACA will also require employers with 50 workers or more to provide “affordable” coverage to full-time workers — those working 30 hours a week or more — or face a penalty. But it is likely that a significant number of businesses will simply pay the fine and drop their employee coverage. The Hill quotes Neil Trautwein, vice president and employee benefits policy council at the National Retail Federation, who said, “It will definitely be less expensive to pay penalties than to provide coverage.”

Other companies are expected to cut employee hours below the 30-hour minimum to avoid having to provide insurance coverage. The Chamber of Commerce survey found that about a third of businesses have already reduced employee hours as a result of the health care law’s requirements, and 27% have already replaced some full-time employees with part-time workers.

Employers are also raising the costs for covering family members on their workers’ policies. The ACA defines affordability of employer-sponsored coverage as costing no more than 9.5% of a worker’s income. But this is the cost of coverage for the individual employee only, not his or her dependents. Companies can get around the law by either raising costs for family coverage, or by dropping coverage for family members altogether.

According to Mercer, a benefits consulting unit of Marsh & McLennan Cos., about 6% of employers presently ban coverage for spouses who can get it elsewhere. Last August, United Parcel Service announced that it was barring spouses from its nonunion health plan if they could get coverage at their own jobs. It is estimated the move affects about half of the 33,000 spouses of white-collar employees at UPS.

Companies are also radically restructuring their health care plans in advance of Obamacare’s “Cadillac” tax. Beginning in 2018, companies with health plans that have total costs of more than an annual limit of $10,200 for an individual and $27,500 for a family will pay a 40% levy on the amount exceeding these limits. White House officials say that the tax is aimed at making employers and workers more “cost-conscious.” In other words, it is deliberately designed to get more companies to adopt high-deductible plans that discourage people from seeking medical treatment due to cost, thereby rationing care.

A survey by the International Foundation of Employees Benefits Plans (IFEB) released in August found that 16.8% of those businesses responding had already begun to restructure their health plans to avoid the “Cadillac” tax, and 40% were considering such action. A survey of Fortune 1000 companies by benefits consulting firm Towers Watson found that 60% of these major companies, employing about 20 million workers, said the impending tax was already having a “moderate” or “significant” influence on decisions regarding benefits for 2014 and 2015.

While employers have been shifting health care costs onto their workforces since at least the late 1980s, the Affordable Care Act is providing the framework and impetus for making even more dramatic changes. The main methods employed are increasing employees’ share of premium costs, and increasing deductibles and other cost-sharing mechanisms.

The Wall Street Journal reports that Gannett Co., owners of more than 80 newspapers and 23 television stations, has replaced its two family plans at the Indianapolis Star with a single high-deductible plan that requires workers to pay the first $3,000 of medical costs each year. Those with individual plans are responsible for the first $1,500 of costs. Trucking company Ryder System Inc. has also replaced one of its two insurance options with a high-deductible plan, and hiked the cost of the remaining option.

President Obama’s top economic adviser, Jason Furman, commented cynically to NBC News, “There’s nothing in the law that tells you you need to raise copayments or deductibles.” But there is nothing in the law that stops companies from raising the costs that workers must bear for health insurance, all the while receiving reduced benefits and inferior medical care.

These radical shifts in the way employer-sponsored health care is being delivered are another indication of the regressive character of the Affordable Care Act. Touted as a plan that would promote “affordable,” “near universal” health care, in reality, the legislation is tailored to the profit interests of employers and the health care industry, while reducing and rationing care for the vast majority of workers and their families.

— Kate Randall
This article originally appeared here.

  • Big Pharma’s Slimy Tactics to Convince You You’re Sick

    Big Pharma’s Slimy Tactics to Convince You You’re Sick

    Chris Campbell

    by Chris Campbell
    On Dec 16, 2014

    Big Pharma is on a quiet rampage of disease-mongering. Every sniffle is an acronym. Every sneeze, the onset of some horrible disease. Chris Campbell, suffering through actual sickness, explores Big Pharma’s slimy tactics. And he digs into what you can do to protect yourself. Read on…

  • Why Governments Love Destruction (and Always Fail to Act)

    Why Governments Love Destruction (and Always Fail to Act)

    Chris Campbell

    by Chris Campbell
    On Nov 3, 2014

    You should be celebrating the coming Syrian war and Ebola. After all, they’re set to stimulate the economy, no? Chris Campbell explores this insane paradigm and uncovers what would happen if the government got out of the way. Read on…

  • Why Sound Investors Choose Gold and... Ebola?

    Why Sound Investors Choose Gold and… Ebola?

    Chris Campbell

    by Chris Campbell
    On Oct 29, 2014

    Savvy investors: Two experts weigh in on why having your own personal gold standard… and betting that Ebola will get worse… could be your best investment decisions of 2014. Read on…

  • The End of Cancer in Your Lifetime? One Picture Has the Answer

    The End of Cancer in Your Lifetime? One Picture Has the Answer

    Chris Campbell

    by Chris Campbell
    On Oct 28, 2014

    Will you see the end of cancer in your lifetime? One revealing picture says it all. Learn how scientists are creating super immunities… and what it could mean for your portfolio. Read on…

    An article in

  • These Three Ebola Bombshells Change Everything

    These Three Ebola Bombshells Change Everything

    Chris Campbell

    by Chris Campbell
    On Oct 16, 2014

    Today, Chris Campbell reveals three pieces of news -- that just surfaced in the past 24 hours -- that could change everything. One, the CDC has failed tremendously already and has put the whole of United States in danger. Second, nurses in the United States are not ready for Ebola. Third, scientific evidence exists that Ebola is airborne through aerosols. Read on…

    An article in , ,

  • shutterstock_83366287

    The Story of a Reluctant Winemaker

    Joe Maga

    by Joe Maga
    On Dec 15, 2014

    Sometimes life deals you lemons. It’s up to you to make lemonade. This month’s Insider Cellar recommended winemaker had no intention of making wine when his family settled just north of Santa Barbara. When our reluctant winemaker’s father walked his land in the early 1980s, he was probably disappointed when he discovered the soil did not have the nutrients to support his strawberry crop

     

  • What You Need to Know: Inside the World’s Largest Ebola Symposium

    What You Need to Know: Inside the World’s Largest Ebola Symposium

    Chris Campbell

    by Chris Campbell
    On Oct 15, 2014

    Chris Campbell is in a room full of more doctors than in all of Liberia. And they’re all there for one purpose: to talk about Ebola. He “snuck” inside the world’s largest Ebola Symposium at Johns Hopkins University. What the panel of speakers are saying boils down to one thing: the government doesn’t know as much as they say… and yes, it’s OK to be worried. Don’t miss this explosive inside report. Read on…

    An article in , ,

  • Own a Gun? Ebola is Your Fault

    Own a Gun? Ebola is Your Fault

    Chris Campbell

    by Chris Campbell
    On Oct 14, 2014

    As the Ebola crisis continues, says MSNBC, guns are to blame for the fear of the masses. In today’s Laissez Faire Today, Chris Campbell looks into the mainstream’s hype… Connecticut’s declaration of public emergency… why Americans are buying Ebola plush dolls... how Chris will sneak into the biggest Ebola conference in the world… and much more. Read on…

    An article in , ,

  • Breaking: On the Ground in Liberia [VIDEO]

    Breaking: On the Ground in Liberia [VIDEO]

    Chris Campbell

    by Chris Campbell
    On Oct 10, 2014

    Cut through all the clutter and see what’s really happening in Liberia. In today’s issue of Laissez Faire Today, Chris Campbell shows you why the CDC is downplaying the situation, and why you still shouldn’t freak out (yet). Read on…

    An article in , ,

  • One Potential Ebola Treatment You’re Not Being Told About

    One Potential Ebola Treatment You’re Not Being Told About

    Chris Campbell

    by Chris Campbell
    On Oct 9, 2014

    The government is on a mad race to create a vaccine for Ebola. What they aren’t telling you is that, in 2003, they may have found a way to beat it naturally. According to one unclassified government document, this little-known plant beat Ebola 90% of the time. Why isn’t the government developing it? Read on…

  • SHI0115

    The Only Path to the American Dream

    Ryan Cole

    by Ryan Cole
    On Dec 10, 2014

    This month, I’m going to tell you a hard truth. It’s one that Wall Street brokers and financial analysts try to hide. It’s one that most newsletter writers choose to ignore. In fact—when it comes to the financial world—this is a “secret” that everyone knows… but no one will mention.

     

  • Survive Ebola: Become a “White Blood Cell” For Mankind

    Survive Ebola: Become a “White Blood Cell” For Mankind

    Chris Campbell

    by Chris Campbell
    On Oct 8, 2014

    Ebola isn’t just spreading. According to one doctor, it could be getting stronger by the day. In today’s Laissez Faire Today, you’ll learn the quick-and-dirty guide to surviving if Ebola comes to your hometown. And eight essential natural medicines to fight Ebola. Read on…

  • ISIS, Ebola Uncut: Why the Mainstream is Late Wrong and Corrupt

    ISIS, Ebola Uncut: Why the Mainstream is Late Wrong and Corrupt

    Chris Campbell

    by Chris Campbell
    On Oct 7, 2014

    The mainstream media has been complacent in reporting the truth about Ebola. They’re not telling the truth about how dangerous the Ebola situation really is. Because of this, millions of lives are at risk. Inside today’s Laissez Faire Today, learn what the mainstream should be telling you about how to protect yourself in the case of an outbreak in the United States. Read on…

  • SourMilk

    Don’t Drink the Tap Water… or the Milk (It’s Not What You Think!)

    Chris Campbell

    by Chris Campbell
    On Oct 1, 2014

    Instead of letting you choose, the government has found it fit to force one potentially dangerous medication on you and your family. Where is it? In your drinking water. Even more outrageous: While Uncle Sam forces medication down your throat, he also says you have no right to choose your own milk. Chris Campbell has all the details. Read on…

  • Escape Obamacare in One Bold Move

    Escape Obamacare in One Bold Move

    Chris Campbell

    by Chris Campbell
    On Sep 19, 2014

    Think it’s impossible to escape Obamacare? Think again. Laissez Faire Today reader David F. shares how he did it and how you can do it too. Don’t see another doctor, take another pill, or shop around for better medical insurance until you read his story. Read on…

  • TimeBomb

    Three Time Bombs in Your 401(k)

    Dave Gonigam

    by Dave Gonigam
    On Dec 4, 2014

    They lurk somewhere in everyone’s 401(k) program. Tick, tick… And it might be years before you discover them. Tick, tick… By the time you do… Kaboom! It’s too late. They’ve already blown up your retirement.

     

  • The Other Epidemic (and How to Stop it)

    The Other Epidemic (and How to Stop it)

    Chris Campbell

    by Chris Campbell
    On Sep 16, 2014

    “While I heartily subscribe to your premise of pursuing one’s dream,” one reader, Donald J., wrote, “there are alternate perspectives worth considering.”[We’re listening… go on.]“Some wiseguy once said that life is what happens to you while you’re waiting for something better to come along. Milton put it a little more poetically in one of his […]

  • The Only Way to Get Rich: A Zen Proverb

    The Only Way to Get Rich: A Zen Proverb

    Chris Campbell

    by Chris Campbell
    On Sep 10, 2014

    Want to get rich? Don’t listen to financial “gurus,” says Chris Campbell. In today’s Laissez Faire Today, Chris shares a Zen proverb and shows how understanding it is the only real way to get rich (and live a rich life). Read on…

  • HappyFamily

    One Free Website to Keep Your Family Safe

    Chris Campbell

    by Chris Campbell
    On Sep 9, 2014

    Ben Franklin once said, “An ounce of prevention is worth a pound of cure.” In today’s Laissez Faire Today, you’ll learn about one FREE website that has the potential to not only keep your family safe – but also open your eyes to what’s happening in your own neighborhood. Chris Campbell has all the details. Read on…

  • Youre_Incredible

    Use “Power Gaps” to Build Your Own Empire

    Chris Campbell

    by Chris Campbell
    On Sep 8, 2014

    All over the world, power is dying. The dictators and tyrants of the world are no longer able to wield it like they once used to. And they’re losing it to the “little guy.” Chris Campbell shows you how to be the king of your castle by taking advantage of this fact. Today, you’ll learn how to grab “power gaps” in the market and channel them into your product idea or project. Read on…

  • SHI_December2014

    This Sector Is Ready to Explode 1,000% Higher

    Ryan Cole

    by Ryan Cole
    On Dec 1, 2014

    One industry is expected to grow from an estimated $77 billion sector by the end of 2014… to around $700 billion in 2024. And that, frankly, is a conservative estimate, as you’ll see below. This isn’t because of some resource boom or new discovery. This isn’t because of funny business or a trader play. This is real spending, done by real companies to combat a very real threat. It’s already an established industry but poised for exponential growth. Because the problem it combats is growing exponentially.

     

  • Free Markets and Malaysian Fireflies

    Free Markets and Malaysian Fireflies

    Chris Campbell

    by Chris Campbell
    On Sep 3, 2014

    The fireflies along the tidal rivers of Malaysia show "feats of synchrony that occur spontaneously, almost as if nature has an eerie yearning for order." Chris Campbell tells you where else this might occur in the world. Also, new technology may revolutionize the agriculture industry and what we think of as a farm.

  • Smoking Pot in the Governor’s Mansion

    Smoking Pot in the Governor’s Mansion

    Chris Campbell

    by Chris Campbell
    On Sep 2, 2014

    Jeff Davis is running for Governor in Hawaii and has an interesting campaign strategy. Also, what motivates hackers is revealed and the findings might surprise you. Finally, Ferguson is discussed in a new light. Chris Campbell has more...

  • Central Planning by Central Bankers

    Central Planning by Central Bankers

    Gary North

    by Gary North
    On Aug 15, 2014

    In a 2009 article, the Huffington Post went into considerable detail about the number of people with PhD degrees in economics employed by the Board of Governors of the Federal Reserve System. This is the government’s branch of the Federal Reserve. It is not one of the 12 regional Federal Reserve banks, all of which […]

  • Will Mandates for Doctors Come Next?

    Will Mandates for Doctors Come Next?

    Barton Hinkle

    by A. Barton Hinkle
    On Aug 6, 2014

    John Foust, a Democrat running for the 10th congressional seat in Northern Virginia, is — like Gov. Terry McAuliffe and other state Democrats — gung-ho to expand Medicaid. His wife’s position is, shall we say, a bit more nuanced.Foust has slammed his opponent, Republican Del. Barbara Comstock, for her opposition to expansion. He has spoken […]

    An article in , ,

  • EightUnusual

    8 Unusual Rules for Investing

    Chris Mayer

    by Chris Mayer
    On Nov 4, 2014

    Where do great investors come from?I’m not sure what the hurdle rate for greatness is, but Guy Spier has put up impressive results. His Aquamarine Fund has returned 463% since inception in 1997, versus just 167% for the S&P 500 (a broad proxy for the market). Put another way, $1 million invested at inception is […]

     

  • Obamacare… A Caring Solution for Opting Out

    Obamacare… A Caring Solution for Opting Out

    Jud Anglin

    by Jud Anglin
    On Jul 25, 2014

    Although the mainstream media have turned its attention away from the wreckage of Obamacare, don’t think for a second that all is well.As the politicos in D.C. focus their attention on the midterm elections in November, now is a great time to study, prepare, and seek out the most affordable, accessible, and highest quality options […]

  • Smart Apps vs. Obamacare

    Smart Apps vs. Obamacare

    Greg Beato

    by Greg Beato
    On Jul 23, 2014

    Health care costs in the U.S. have been rising so steadily for so long that containment barely seems possible. Even optimists don’t dream of cutting the price tag. As its official name — the Patient Protection and Affordable Care Act — suggests, Obamacare aims for affordability, not radical reduction.But at a time when we’re all […]

  • Sensible Vices

    Sensible Vices

    Mark Sisson

    by Mark Sisson
    On Jul 10, 2014

    One issue I have with our modern lifestyle — of many — is the emphasis on perfection. Newer, slimmer, bigger, better, faster: the message of perfection screams out to us from glossy magazines, slick television ads and popup ad after popup ad. (Or purrs, cajoles, teases, and smothers.)While I do believe fundamentally in pursuing whatever your […]

    An article in ,

  • The Real Forgotten Man

    The Real Forgotten Man

    Chris Mayer

    by Chris Mayer
    On Jul 2, 2014

    Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]

  • SHI_November2014

    A Double-Digit Winner That’s Attacking America’s No. 1 Killer

    Ryan Cole

    by Ryan Cole
    On Nov 1, 2014

    I made a choice five months ago. And that choice has saved my life. This wasn’t some instantaneous decision, with danger near. It wasn’t some great “eureka” moment, either. There probably isn’t a person out there who would question what I did. In fact, more and more people are making the exact same choice every day. And each one does it to the sound of applause.

     

  • The Challenge of Measuring Obamacare's Results

    The Challenge of Measuring Obamacare’s Results

    Peter Suderman

    by Peter Suderman
    On Jun 26, 2014

    In September 2009, when President Obama made a primetime speech pitching his not-yet-passed health care overhaul, he made the following promise: “I will not sign a plan that adds one dime to our deficits — either now or in the future. Period.” To prove his seriousness, he further promised that “there will be a provision […]

    An article in ,

  • This Device Scans Any Organic Object

    This Device Scans Any Organic Object

    Wayne Mulligan

    by Wayne Mulligan
    On Jun 16, 2014

    What’s the #1 reason a start-up fails?It runs out of money!And why would it run out of money?Because nobody wants the product it’s selling!For early-stage investors, this presents a bit of a conundrum:If a product doesn’t exist yet, how do you figure out if there’s demand for it?And how do you figure it out before […]