No kidding? This is exactly what the Obama administration and their socialist cohorts want. Employers will look at the options, and all of them will slowly come to the realization health care benefits cost money and since the federal government is going to cover everyone, why be involved at all?
From Fox News with my emphasis in bold.
Republicans on the House Ways and Means Committee surveyed the top 100 companies about how much they spent on health care — a total of 71, covering 5.9 million employees, responded. The results suggested it would be far more attractive for companies to drop workers from those plans than keep them.
Even after paying a penalty of $2,000 per employee, the companies stand to save $28.6 billion in 2014 alone by shifting employees to health insurance exchanges governed by strict federal standards. The companies stand to save more than $422 billion over the first 10 years of the law by doing this.
There are a few things you have to understand here…
First, offering health care benefits is a pain in the ass. Companies have teams of employees who spend hundreds and hundreds of hours researching options and working with providers to come up with plans. Then, you have what I’ll refer to as “the employee morale problem” when people bitch and moan about the plans they have to choose from. They compare the plans offered to other employers – or maybe state/federal employees – who only have to pay a $20 co-pay for doctor visits and $25 for a visit to the ER. Even if you offer a good plan, employees still might complain.
Then, if you’re a company that is self-insured, you have to ensure you have cash on hand to pay out claims. Some of those claims can be big money.
Then there is the cost. The rising costs that employees don’t see. When health care costs go up, employers can not just blindly absorb those costs, they are past on with higher prices to consumers, reductions in benefits to employees, and lower pay raises in the future.
But now that the Obama administration in all its wisdom have offered employers an opt-out that will only cost them $2,000 per employee, it’s only a matter of time before one or two pull the trigger. Then, domino effect. Why not off-load all of those issues to the government for two grand?
For those companies who do not hand over the health care administration and costs to the federal government, soon shareholders will demand they do so. You think I’m kidding? If you have two companies with 25,000 employees each that compete in the same industry and one of them pays the fines and saves a couple of million dollars or more, the shareholders of the other company will quickly demand the same.
You think that’s inhumane? Bad business practice? You’re wrong, it’s a solid business practice for this one reason. If you’re a company who elects to keep offering benefits when your competitors do not, their costs will be significantly lower than yours. You’ll be able to stay in business for a little while, but eventually consumers will stop buying from you because your costs are higher.
Think your “humane” efforts will result in customers sticking with you and paying the higher price for your product or service? Sorry Charlie, if the other company provides the same quality and service at a lower cost, you’ll be soon gone from the picture.
That’s the reality.