Survey: Almost 10% of employers may end health insurance

[WestVirginiaRebel]

USA Today:

INDIANAPOLIS – Nearly one in 10 midsize or large employers expects to stop offering health coverage to workers once federal insurance exchanges start in 2014, according to a survey from a large benefits consultant.

Towers Watson also found in a survey completed last month that an additional 20% of companies are unsure about what they will do.

Another big benefits consultant, Mercer, found in a June survey of large and smaller employers that 8% are either "likely" or "very likely" to end health benefits once the exchanges start.

Employer-sponsored health insurance has long been the backbone of the nation's health insurance system. But the studies suggest some employers, especially retailers or those paying low wages, feel they will be better off paying fines and taxes than continuing to provide benefits that eat up a growing portion of their budget every year.

The exchanges, devised under health care overhaul, may offer an alternative for workers. These exchanges aim to provide a marketplace for people to buy insurance that can be subsidized by the government based on income levels.

A large majority of employers in both studies said they expect to continue offering benefits once the exchanges start. But former insurance executive Bob Laszewski said he was surprised that as many as 8% or 9% of companies already say they expect to drop coverage.

Such a move comes with potential payroll-tax headaches and could subject firms to fines. It also would give their employees a steep compensation cut if companies don't raise pay in exchange for ending coverage.

"Dropping coverage is going to be very difficult for these (companies) to do," said Laszewski, a consultant who was not involved with the studies.
________

So now they'll be faced with going out of business or not hiring instead...