71 Percent of Top Companies Could Drop Insurance Under Obamacare
(CNSNews.com) – A report from the House Ways and Means Committee finds that 71 of the nation’s top 100 companies would find it far more economical to drop their health care plans and simply pay the penalty for not complying with the Obamacare employer insurance mandate.
The report, published May 1, surveyed 71 of the 100 companies in the Fortune 100 list of large corporations and finds that all of them would save considerable amounts of money by dropping their health care coverage instead of complying with the Obamacare insurance mandate.
“According to data provided by the 71 Fortune 100 companies that responded to the inquiry, they could save a total of $28.6 billion in 2014 alone if they stopped offering health insurance to their U.S. employees and instead paid the employer mandate penalty for not doing so,” the report said.
“In the highly competitive global market in which these Fortune 100 companies operate, it is unrealistic for them not to consider the more economical choice of dumping health coverage and telling their employees to purchase health insurance through the Exchanges.”
During the health care reform debate, Obama famously promised that people would be able to keep the coverage that they currently have – a promise that looks to be in increasing danger.
The report – based on data supplied by the 71 major corporations – finds that American companies have no faith in the administration’s contention that Obamacare will reduce health care costs. Instead, they assume that the cost of providing health care to their employees will skyrocket.
“Alarmingly, 84 percent of responding employers expect their future health care costs will increase at rates that are greater than those they’ve experienced over the past five years,” the report said.
“During this period, employers responded that their health insurance costs have increased 5.9 percent, on average, while they expect future health costs will grow 7.6 percent, on average.
Because health care costs are expected to continue to rise, the increasingly uneconomical cost of providing health care could put the benefits of 5.9 million full and part-time workers at risk.
Faced with massive health care costs, employers would be forced to make a choice – drop coverage, lay off some employees, or both.
“Not all employers have the financial resources to provide coverage to their employees, and not all employees seek jobs to obtain ESI [Employer-Sponsored Insurance]. As a result of the employer mandate, many businesses that cannot afford to provide health insurance coverage for their workers will face a massive increase in costs – which for many companies exceeds their profit margins,” the report stated.
“Even if companies are not forced to eliminate jobs, the law creates a financial incentive for employers to drop coverage, save labor costs, and send employees to the government-run exchanges where some will receive taxpayer-funded subsidies,” the report added.
In the case of these top companies, the savings from dropping health coverage is rather large. According to data provided by the companies, the average Fortune 100 company could save $402.3 million in 2014 by dropping coverage and pushing their employees onto government-run exchanges. Over a 10-year period, those savings would total $5.9 billion.
The report only covered the top 100 companies in America, leaving out the thousands of other employers covered by the mandate. The Obamacare mandate requires employers with more than 50 employees to provide government-approved health care plans.
The report said that the myriad of insurance mandates and regulations in Obamacare are the reason that companies expect their health costs to rise so dramatically.
Among the regulations and mandates that employers think will drive up health care costs are the requirement that all health plans conform to government-approved coverage regulations, the mandate that insurers provide numerous procedures, medications, and screenings for free, and the new reporting requirements employers must comply with.
Based on the responses from the 71 major companies, the report concluded that there were thousands of companies that could face the same Catch-22 of dropping health coverage or paying huge new costs.
“The evidence suggests millions of Americans could soon lose their current health coverage. This is just the tip of the iceberg given that this study only analyzed 71 Fortune 100 companies. There are tens of millions of additional Americans who receive health insurance through non-Fortune 100 companies with more than 50 full-time equivalent employees that will face a similar choice,” the report said.