Just think what will happen when the employer mandate really kicks into gear next year. One Ohio company has decided to get ahead of the game by acting now — allowing them to save costs on both the premiums and the fines for at least the next year. WEWS reports on PSC Metals and the move of an additional 1,000 people into the ObamaCare exchanges (via TWS):
If PSC drops its health insurance, the company would face a penalty of $2000 per employee under the Affordable Care Act.
But for some companies, that penalty may actually be a big savings, says Tom Sutton, a NewsChannel 5 political analyst and chair of political science at Baldwin Wallace University.
That’s because companies pay up to $7,000 for individual coverage and up to $20,000 for family coverage. Compared to the $2,000 penalty?
“You’re going to save a lot of money,” Sutton says.
And that’s not all. Sutton adds, “The Obama Administration has postponed the employer mandate penalty until 2015.”
That means, if a company cuts its health insurance now, they have a whole year without both the insurance payments to make or the penalties to pay.
There’s another angle to this, too. Don’t forget that the employer mandate requires companies with more than 50 employees to provide subsidized coverage for their workers — but not for spouses at all, and doesn’t require employers to provide subsidies to cover dependent children. The employees have to pick up the full cost of that coverage if offered by their employers, but can get taxpayer-provided federal subsidies if the employer refuses to comply with the mandate. Employees with children may well be financially better off going into the exchanges (although perhaps not in provider coverage), while employers save money by dumping group coverage altogether.
The CBO estimates that 6 million people will lose their employer-based coverage by 2016, but I’m betting it’s going to be a lot higher than that for the above reasons:
Millions of people are expected to lose their employer-based healthcare coverage over the next decade, according to business surveys and estimates by the Congressional Budget Office (CBO).
By 2016, the CBO has projected that 6 million fewer people will receive employer-based health insurance compared with this year. The estimate includes those who could obtain coverage through their work but choose not to.
Experts say the healthcare law is not the cause of the general shift by employers from providing healthcare, but acknowledge supporters of the law will have to defend it.
It’s going to be far worse than that, and there will be no doubt as to the reason for the change. The ObamaCare law incentivizes those decisions, and the only disincentive is competition in the labor market. As soon as the first few employers begin dumping coverage, that disincentive will disappear rapidly.