As we near the end of 2014, we’re beginning to see some of our earlier predictions come true: 1) small employers are beginning to re-think their decision to offer health insurance coverage, and 2) employees are realizing that this may actually be a good thing.
An article yesterday in the Austin American Statesman entitled “Small businesses grapple with rising health insurance costs” reports on the reality for many small employers: even when a company pays the full cost of single coverage, families pay an enormous amount for their health insurance premiums. And companies that do offer generous benefits to their employees are having difficulty maintaining that coverage as insurance costs continue to rise.
The article cites a Mercer report that “more than one-third of small businesses said they’ll likely eliminate health benefits by 2018” and that others who will continue to offer health insurance “are exploring new ways to offer that coverage,” including higher-deductible HSA-compatible plans.
A separate article from HealthInsurance.org discusses the fact that employers that do drop their group health plan may actually be doing their employees a favor. The article is appropriately titled “Your employer is dropping health coverage. Yay?” and explains that employers who do offer health coverage usually block employees and their family members from the generous government subsidies available in the individual market. Eliminating the group coverage enables families to apply for premium tax credits that can lower their monthly costs significantly.
A recent poll by the Kaiser Family Foundation found that people’s opinions on the health reform law are pretty flexible; they tend to change when they’re provided with more information. As people continue to learn how the law works, they’ll begin to realize that group health insurance is no longer the answer. And this is very good news for brokers who have an alternative.