Why Employers Will Stop Offering Health Insurance

Here’s a prediction: By 2025, “fewer than 20 percent of workers in the private sector will receive traditional employer-sponsored health insurance.” The source of this claim? Dr. Ezekiel J. Emanuel, in his just-published book, “Reinventing American Health Care.” 

In it, Mr. Emanuel argues that in the next two or three years, “a few big, blue-chip companies will announce their intention to stop providing health insurance. Instead, they will raise salaries substantially or offer large, defined contributions to their workers. Then the floodgates will open.” He says that few small businesses will join the SHOP exchanges set up for them and that most of those that offer coverage are even more likely than big companies to drop it, since those who employ fewer than 50 workers face no mandate to offer it in the first place, which Mr. Emanuel thinks is fine.

DYI Comments:  Corporate America due to world wide competitive pressures has wanted to shed two large volatile costs.  Defined benefit pension plans and health care.  The old style pension plans for the most part are long gone and those remaining are waiting for their pension recipients to die off closing out this cost.  They have been replaced by defined contribution plans (401k's) where the employee is responsible for the amount of contributions and rate of return. 

Health care with its sky rocking cost has put corporations at a disadvantage with other countries that have either State sponsored plans or none at all.  Whether this is right or wrong it is the direction as a country we are headed.  To put it bluntly Corporate America wants these two "Monkeys off their backs!"  Whether ACA (ObamaCare) is the answer for Corporate America it is highly debatable, but the direction is clear in their desire to shed these costs.

DYI