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.

  • shutterstock_240547366

    5 Hot Tax Deductions to Consider for 2015

    Mark Kohler

    by Mark Kohler
    On May 5, 2015

    Start a Small or Home-Based Business and Begin Saving Yourself Thousands

    Most of you have likely already filed your taxes for last year, while others may have filed an extension, but I guarantee all of us are thinking of ways to save this year after looking down the barrel at April 15. Read on...

     

  • StomachPain

    Can You Guess: Why I Had Horrible Gut Pain

    Nate Rifkin

    by Nate Rifkin
    On May 4, 2015

    What happens when Living Well Daily editor Nate Rifkin starts feeling horrible abdominal pain, and he can’t figure out why…

    An article in

  • FarmersMarket

    Grocery Stores Fear This

    Nate Rifkin

    by Nate Rifkin
    On May 1, 2015

    Where are people spending their money today, even if they’re strapped for cash? Not where big chain grocery stores would like…

    An article in

  • DietSoda

    How Fat is Your Liver?

    Jasmine Lemaster

    by Jasmine LeMaster
    On Apr 29, 2015

    One in three people have fatty liver. How do you know if you have it and what can you do to prevent it? Find out here.

    An article in

  • fatty_liver

    A Bigger Threat to Your Liver Than Alcohol

    Nate Rifkin

    by Nate Rifkin
    On Apr 27, 2015

    What’s causing so many livers to choke on their own fat? Living Well Daily begins unravelling the mystery…and the answer’s not what you think.

    An article in

  • shutterstock_240547366

    The “Obamacaid” Shuffle

    Doug Hill

    by Doug Hill
    On May 5, 2015

    A Note From The Club Director

    You remember the old Western movies where the gunslinging bullies shoot at the feet of some poor sap store owner? The affable entrepreneur has to jump and “dance” just so he doesn’t lose a foot. Meanwhile, the goons in the black hats clap and laugh with delight at the spectacle. Read on...

     

  • SteviaLeaves

    What the Heck Is Stevia? Part 2

    Jasmine Lemaster

    by Jasmine LeMaster
    On Apr 24, 2015

    Could there actually be a sugar replacement that’s natural and good for you? Read on to learn the truth about stevia.

    An article in

  • Stevia_Sugar

    What the Heck Is Stevia?

    Jasmine Lemaster

    by Jasmine LeMaster
    On Apr 22, 2015

    Could there actually be a sugar replacement that’s natural and good for you? Read on to learn the truth about stevia.

    An article in

  • AlcoholWorkout

    How to Combine Alcohol and Exercise

    Nate Rifkin

    by Nate Rifkin
    On Apr 20, 2015

    We examine studies measuring alcohol and its effect on recovery from exercise…and whether or not you should partake.

    An article in

  • NorrisPunch2

    Chuck Norris (Sort of) Lays the Smackdown on N.Y. Attorney General

    Nate Rifkin

    by Nate Rifkin
    On Apr 17, 2015

    The New York attorney general supplement saga continues, and this time a famous martial artist has entered the fray.

    An article in

  • shutterstock_154183421

    Don’t Let “Obamacaid” Bankrupt You

    Jud Anglin

    by Jud Anglin
    On May 5, 2015

    Affordable Insurance Supplements That You May Have Not Considered

    Last week, I was speaking to a close friend of mine who just happens to be a highly reputable and successful insurance agent in California with 30 years of experience.

    So as to protect his identity, I’ll leave his name anonymous. Read on...

     

  • Vitamins

    Is This Vitamin Bad for Your Health?

    Jasmine Lemaster

    by Jasmine LeMaster
    On Apr 15, 2015

    Is this synthetic vitamin bad for your health? Knowing the difference between folate and folic acid could help protect you from cancer, cognitive decline, and more.

    An article in

  • cornsyrup

    High Fructose Corn Syrup Apologist or Shill?

    Nate Rifkin

    by Nate Rifkin
    On Apr 13, 2015

    Living Well publishes details on a high fructose corn syrup study which has been ignored by the mainstream media

    An article in

  • Broccoli

    Broccoli Deep-Fried in Chocolate Sauce

    Nate Rifkin

    by Nate Rifkin
    On Apr 10, 2015

    Living Well reveals the neat trick to make virtually any vegetable taste good, using two “forbidden” ingredients and a lesson from Seinfeld

    An article in

  • HerbMedicine

    The Top 3 Herbs to Help Prevent Colds, Flu, Food Poisoning, and More

    Jasmine Lemaster

    by Jasmine LeMaster
    On Apr 8, 2015

    Have a cold or flu? Get sick with food poisoning? Before you resort to antibiotics, You MUST read this.

    An article in

  • TinfoilHat

    EMF Waves: Tinfoil Hat Paranoia or Serious Health Threat?

    Nate Rifkin

    by Nate Rifkin
    On Apr 6, 2015

    Living Well tackles the controversial issue of EMF wave safety, and whether our increasing levels of exposure are causing us more harm

    An article in

  • GMOfood

    We Asked, You Answered: The GMO Debate Continues…

    Nate Rifkin

    by Nate Rifkin
    On Apr 3, 2015

    Living Well publishes reader feedback on the proposed GMO labeling law. One opinion wins by a landslide…

    An article in

  • HealthSup

    More Magnesium — Are Any Other Forms a Good Choice?

    Jasmine Lemaster

    by Jasmine LeMaster
    On Apr 1, 2015

    We hit a rich vein when we wrote about magnesium last week. Readers weighed in and demanded answers... so we’re back to make this whole magnesium thing a little less murky.

    An article in

  • Feel Empowered. Even When Handcuffed in a Trunk.

    Feel Empowered. Even When Handcuffed in a Trunk.

    Chris Campbell

    by Chris Campbell
    On Mar 30, 2015

    You never really notice how oddly shaped trunks are unttil you’re in one with handcuffs on. At least, that’s what Chris Campbell says after being shoved into a trunk in Las Vegas. He had three minutes to escape. What happened? Read on…

  • GMOfree

    The Proposed GMO Labeling Law: Good or Bad?

    Nate Rifkin

    by Nate Rifkin
    On Mar 30, 2015

    Living Well covers the latest update in GMO labelling laws, and how a newly proposed law called the Safe and Accurate Food Labeling Act might not be as great as it sounds.

    An article in

  • FoodEnergy

    New Breakthrough for Immediate Energy

    Nate Rifkin

    by Nate Rifkin
    On Mar 27, 2015

    Living Well gets the inside scoop on a new product for instant energy, calmness, and focus. In fact, one of our editors takes it for a personal test-drive.

    An article in

  • FightFatigue

    Banish Fatigue Instantly

    Jasmine Lemaster

    by Jasmine LeMaster
    On Mar 25, 2015

    If you suffer from chronic fatigue or fibromyalgia or just don’t have as much energy as you used to, read on to discover an easy way to banish fatigue in minutes.

    An article in

  • GroceryStore

    Magnesium Meltdown at the Grocery Store

    Nate Rifkin

    by Nate Rifkin
    On Mar 23, 2015

    Living Well Daily reveals the shocking truth about magnesium supplements, and how you may be getting ripped off. One popular form of magnesium might only be absorbed into your body at a rate of 4%. In today’s issue, you’ll discover which one it is, and a superior alternative.

    An article in

  • 25 MORE Ways to Tangle the Titan

    25 MORE Ways to Tangle the Titan

    Chris Campbell

    by Chris Campbell
    On Mar 21, 2015

    There are nine rules you need to know to thrive in today’s new economy. Heed them or fall behind. Plus, Chris Campbell shows you 25 more ways to subvert the State. Read on…

  • 25 MORE Ways to Outrun the Ogre

    25 MORE Ways to Outrun the Ogre

    Chris Campbell

    by Chris Campbell
    On Mar 20, 2015

    It was Archimedes who once said, "Give me a lever long enough, and I'll move the world." Well, if Archimedes were alive today, he'd take one look at the Exponential Organization... and he'd move the world. Read on...

  • HealthyFoods

    Pill Hawkers, Seaweed Chips, and Mr. Ginseng

    Nate Rifkin

    by Nate Rifkin
    On Mar 20, 2015

    What happens when two researchers from Laissez Faire elbow their way through 71,000+ health-obsessed people at the biggest natural ingredient expo in the country? They tested out exercise gizmos, met Mr. Ginseng, and even dressed up in lab gear for a secret project. This premiere issue of Living Well Daily has the details, including photos.

    An article in

  • Learn to Kill For World Peace

    Learn to Kill For World Peace

    Chris Campbell

    by Chris Campbell
    On Mar 10, 2015

    Nietzsche gets it. Learning how to kill another human being will make you a more peaceful individual. And Chris Campbell has invited Tim Larkin, founder of Target Focus Training to show you why this is. Read on…

  • Your Health Results Are Enclosed. Don’t Worry. You’re OK!

    Your Health Results Are Enclosed. Don’t Worry. You’re OK!

    Chris Campbell

    by Chris Campbell
    On Mar 4, 2015

    LFT plays a game of “Eat This… Don’t You Dare Eat That!” And Putin has just pulled off the impossible. Don’t worry. Everything is going to be OK. Find out why in today’s Laissez Faire Today. Read on…