Employers Dropping Health Care Coverage

Nearly 20 percent of employers surveyed in a recent Hewitt Associates study said they will drop health care benefits to employees. Additionally, when asked to what extent health care reform proposals defined by the Obama administration would affect their current health care strategies, 44 percent said it would have no impact.

Smaller employers are pinched the hardest. Many are looking for alternatives to help employees with health care costs.

“Small companies are definitely being squeezed by the cost of health care and more are dropping coverage altogether because they can’t afford it,” said Andrew Sullivan, senior vice president of individual and small group business for the Cigna insurance company.

Steve Millard, president and executive director of the Council of Smaller Enterprises, a small business advocacy group, believes this trend will continue causing employers to find creative ways to help workers get insurance on their own. He cites a handful of companies who reimburse employees for insurance premiums. Others put money into a health reimbursement account.

The reality of individual plan coverage, however, is that it is expensive and many people cannot pass the screening process. Carolyn Abraham, director of Medicare and direct consumer sales for Kaiser Permanente’s Ohio office says, “The reality is, many people cannot afford the options or, the one they can afford, they can’t pass the medical screen. Less expensive individual plans often are designed for healthy people who don’t expect to need much health care.”

Jim Winker, head of Hewitt’s North America health management consulting practice said in a statement that “in today’s environment, employers are under pressure to cut health care expenses, but they realize that short-term management tactics do not address the underlying drivers of health care cost. This leaves them with two options: making a long-term commitment to improving the health of employees and their families, or exiting health care altogether.”

For more details, go to:

http://www.workforce.com/section/00/article/26/22/90.php

http://www.workforce.com/section/02/feature/26/19/29/index.html