When healthcare reform passed last year, the Congressional Budget Office predicted that only 7% of employes would end up on subsidized health insurance policies through a health insurance exchange. Well, the results of a new survey from McKinsey & Co. would beg to differ. According to the survey of 1,300 employers, 30% said they would “definitely or “probably” drop their employer-sponsored health insurance benefits (ESI) by 2014, and a whopping 50% of employers with high awareness of healthcare reform would “definitely” or “probably” drop their health insurance benefits:
However, our early-2011 survey of more than 1,300 employers across industries, geographies, and employer sizes, as well as other proprietary research, found that reform will provoke a much greater response.
• Overall, 30 percent of employers will definitely or probably stop offering ESI in the years after 2014.
• Among employers with a high awareness of reform, this proportion increases to more than 50 percent, and upward of 60 percent will pursue some alternative to traditional ESI.
• At least 30 percent of employers would gain economically from dropping coverage even if they completely compensated employees for the change through other benefit offerings or higher salaries.
• Contrary to what many employers assume, more than 85 percent of employees would remain at their jobs even if their employer stopped offering ESI, although about 60 percent would expect increased compensation.
Of course, employers won’t simply be able to drop their health insurance coverage, though. Employers with more than 50 employees will be required to provide standard health insurance benefits to their employees or risk paying penalties. And by 2014, employees without health insurance benefits will be able to buy health insurance on the state-run health insurance exchanges.
What would you do if your employer dropped its health insurance plan? Tell us about it!
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