Job-based health plans' future still uncertain

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By Ricardo Alonso-Zaldivar
Monday, October 25, 2010

The new health-care law wasn't supposed to undercut employer plans that have provided most people in the United States with coverage for generations.

But last week, a manufacturer told its workers that their costs will jump partly because of the law. Also, a governor laid out a plan for employers to get out of health care by shifting workers into taxpayer-subsidized insurance markets that open in 2014.

While it's too early to proclaim the demise of job-based coverage, corporate number crunchers are looking at options that could lead to major changes.

"The economics of dropping existing coverage is about to become attractive to many employers, both public and private," said Gov. Phil Bredesen (D-Tenn.).

That's just not going to happen, White House officials say.

"The absolute certainty about the Affordable Care Act is that for many, many employers who cover millions of people, it increases the incentives for them to offer coverage," said Jason Furman, an adviser to President Obama.

Yet at least one major employer has shifted a greater share of plan costs to workers, and others are weighing the pros and cons of eventually forcing employees to strike out on their own.

"My conclusion on all of this is that it is a huge roll of the dice," said James Klein, president of the American Benefits Council, which represents big company benefits administrators. "It could work out well and build on the employer-based system, or it could begin to dismantle the employer-based system."

About 150 million workers and family members are now covered.

When lawmakers debated the legislation, the nonpartisan Congressional Budget Office projected that it would have only minimal impact on employer plans.

Two provisions in the new law are leading companies to look at their plans in a different light.

One is a hefty tax on high-cost health insurance aimed at the most generous coverage.


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© 2010 The Washington Post Company

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