A McKinsey & Co. study says 30% of all employers will “definitely” or “probably” stop offering their workers health insurance once the bulk of the healthcare reform law’s mandates take effect in 2014.
That figure jumps to 50% among employers with a “high awareness” of the reform law’s requirements, the study found.
While the Obama administration was quick to question the study, the numbers do not surprise me. As more and more small business owners, mid market accounts and large group administrators examine the repercussions of Health Care Reform, they are finding that there is an economic disincentive to provide coverage as outlined in the law. Many owners find that paying the penalty and providing alternative compensation to their employees makes more fiscal sense for their business. This strategy seems sound, as the same study found that 85% of employees would stay at their employer even if they were to drop coverage, and only 60% would expect some kind of additional compensation for their loss of coverage.
As a small business owner, what will you do in 2014? What are you doing in the meantime? As always, you can use the same tools insurance professionals and insiders use to quote your current group. Alternatively, if you are one of those employers (and specifically, small business owners) who has decided to drop coverage already, you and your employees can go here to find an individual plan.