Dropping Health Insurance

"Steve Hooper, of the Health Economics Group, a company that manages corporate benefit plans, says most of his employees have incomes low enough to receive federal subsidies," says Stacy Cowley in Dropping Health Plans, to Pick Better Coverage. Employers are not offering health insurance anymore, after they are realizing that their employees would be better off that way. "Mr. [Keith] Perkins, who is 54, did the math and calculated that most of his employees, who are spread across Maryland, West Virginia and Pennsylvania, would come out ahead if he dropped his group policy and let them buy insurance individually through the new federal and state exchanges," says Stacy Cowley. Mr. Perkins "was tired of trying to choose one plan every year to cover all of their diverse needs." He found a way for the employees to make their own choices. "When I did the subsidy calculator, I realized many of them would actually be better off if we didn't offer coverage. We took the amount of money we were paying for health insurance and dumped it into their paychecks instead. And this way, they get to make the choice, not me," says Mr. Perkins. This way, the employer doesn’t have to worry about fitting the needs of the employee when it comes to health insurance. “Employers are seriously considering walking away from their plans,” says Thomas Harte, an insurance broker with Landmark Benefits in Hampstead, N.H.

I think it is a good thing that Keith Perkins put the money he was paying for health insurance into his employee’s paychecks. It gives them the opportunity to choose how they deal with their health insurance on their own, and it means that the employer does not have to include the health insurance in his plan. To me, it seems like this is better for both sides. “The decline in the number of small businesses offering health insurance began long before the new law… It is too early to say how the Affordable Care Act will affect that trend, but health insurance has long been a headache for small businesses. Their policies are typically more expensive than comparable plans available to larger employers, and because the risk pool of participants is tiny, one sick employee can increase a group’s premiums sharply,” says Stacy Cowley. Small businesses’ policies are probably more expensive so that people will want to be employed there. They probably have to offer more so a person would choose them over a bigger business.

Source: "Dropping Health Plans, to Pick Better Coverage" by  Stacy Cowley, from http://www.nytimes.com, published December 11, 2013