Will companies dump health benefits?

Thanks to Obamacare, more companies are likely to dump health benefits

Excerpt:

S&P predicts that companies will do the math and find it irresistible to move more and more of their workers off company-run plans and into the exchanges established under Obamacare, as the ACA is known. Companies with more than 50 workers will have to pay a penalty if they don’t offer insurance, but it could still be cheaper when factoring in the savings on healthcare; that’s because insurance costs have skyrocketed during the last 20 years, making healthcare one of the costs companies find most difficult to control. The rising and unpredictable nature of healthcare costs led AOL CEO Tim Armstrong to make his unfortunate comment about "distressed babies" earlier this year. Armstrong took a lot of heat and later apologized, but many CEOs expresss similar frustrations (usually privately). Health Benefits Phased Out The migration away from employer-based coverage would probably occur in phases. Companies might start by moving part-timers and new hires off their plans, since they tend to get paid less than other workers and would be more likely to qualify for subsidies under the exchanges. Established employees might be the last to lose employer-based coverage, and companies would still be free to offer healthcare benefits as they choose. Such moves would probably be controversial at first, given that just about everything related to Obamacare is controversial. And most companies will probably be reluctant to make big changes likely to produce negative headlines. “However, once a few notable companies start to depart from their traditional approach to health care benefits, it's likely that a substantial number of firms could quickly follow suit,” S&P Capital predicts. S&P likens this change to the evolution away from defined-benefit pension plans toward employee-managed 401(k) plans and IRAs. It would put more burden on individuals to choose a plan from among dozens that might be offered. Out-of-pocket costs could rise, since employers today essentially subsidize premiums at many companies. Companies could offer stipends meant to cover some or all of the premium for workers who buy coverage on an exchange, just as many companies make contributions to workers’ 401(k) plans. Still, some people undoubtedly would go without insurance, just as many workers who ought to save for retirement don’t.

Comment: Likely!