GOP Study Shows Companies Would Save Money By Dropping Health Care Offerings, Paying Fine

Highlighting what we’ve known for quite some time

(Washington Times) Trying to build their case that President Obama’s health care law will destroy traditional employer-sponsored insurance, House Republicans released a study Tuesday showing that the largest companies could save billions by kicking workers off their current health plans and pushing them into government-subsidized exchanges.

In a dig at Mr. Obama, who promised that the law would allow people to keep their current coverage, the report found that companies could save $4,821 per worker if they chose to end coverage and instead pay a fine — leaving their employees with no recourse but to buy insurance on their own through the exchanges.

“It is clear to me that because of this law, Americans will not be able to keep the health care plan they have and like,” said Rep. Dave Camp of Michigan, chairman of the House Ways and Means Committee. He charged that the Affordable Care Act will make insurance so expensive that employers won’t be able to afford to offer it anymore.

Obamacare provides multiple incentives for companies to drop their offerings and push their employees to the Exchanges. It’s not a bug, it’s a feature. Of course, Democrats say this is bunk

Josh Drobnyk, spokesman for Rep. Sander M. Levin, the ranking Democrat on the committee, said official government scorekeepers had studied the issue and found that relatively few employers are likely to drop their coverage over the next few years.

Mr. Drobnyk said companies offer insurance as a way of enticing the best workers, and said that won’t change.

“According to the logic of this so-called report, businesses could have ‘saved’ even more money if they dropped employee health coverage years ago, which is perfectly legal and carries no penalty,” he said.

He’s partially right, some companies do offer health insurance to entice workers. But, in this century, offering health insurance, along with vision and dental (dental used to be the really big deal, for those of us old enough to remember), is simply considered part of the wages. Most companies, at least those with 50 or more employees, offer insurance. At least to full time employees. And there’s the rub.

I’ve offered this explanation many times within the blogs I post at, in comments, and in Real Life. But, let’s consider again: you are the owner of a company with over 50 employees. You offer health insurance. You’re spending anywhere from $8k-$12k a year per employee (the average costs across the board). You move your plans to a health savings account, which immediately lowers costs to $6k-$8k a year. But, Obamacare limits contributions to HSA, setting a cap at $2,500. Obamacare causes many other problems with HSAs, too.

But, you’re a good boss, and want to provide health insurance to your employees. You believe in social justice, spreading the wealth, and the “general good.” And, you’re generous in offering health insurance to your part time employees, though they would pay about 3 times what a full timer would pay. Hence, none of them get insurance through the company. Hey, you offered!

But, there’s a little problem: if just one employee gets insurance through the Exchange, you will be responsible for paying the fine, probably $2,000, for every single employee. You’re already paying roughly $350,000 a year to provide health insurance, just part of doing business. But, you’re really not keen on taking the chance that you will have to give the Central Government another $100,000 a year. Spreading the wealth only goes so far. So, you’re options are to a) take your chances or b) drop your insurance, perhaps offering $2k a year extra in earnings or a subsidy so your employees can get insurance on the Exchange, and simply paying the fine.

Companies won’t take the chance. They’ll drop their insurance. Which is what Obamacare wants, that way more and more people will be forced into the government exchange.

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8 Responses to “GOP Study Shows Companies Would Save Money By Dropping Health Care Offerings, Paying Fine”

  1. Trish says:

    Okay- who the hell didn’t already know, or at least consider this might be the case? Any of you morons who didn’t think this through and realize the intent and the results of Obamacare, please stand up.
    Even before, we knew. And after it passed, when we were allowed to find out what was in the 2700 page monster of a bill, it was clear.

  2. Sadly, Trish, every time I bring this explanation up to ObamaZombies, and position it as “it’s your company, what do you do?” they deflect like crazy. The word “hypothetical” gets thrown out quite a bit. But, you can see in their eyes that they would dump insurance in a heartbeat.

    Thanks, RR!

  3. Exactly. They tend to be either brainwashed or brain-dead.

  4. Fake Drudge says:’d as “FEDS: Cheaper to Violate Law, Than to Comply…”

  5. gitarcarver says:

    The sad thing is that the CBO said this in its very first analysis of the bill. So while Congress was running around instead of reading the bill (and the analysis) and congratulating Obama on this “big f******” deal, no one thought companies would do what is in their best interest and in the interest of shareholders.

    How clueless is that?

    However, there is only one resolution to this. If (God forbid) the Supreme Court doesn’t strike the ACA down on so many levels, the Democrats will be back to raise the penalties.

    We know the financing for this monstrosity is not sustainable, so the Congress will simply revisit the issue to raise both “contributions” and penalties for failing to contribute.

    It would not surprise me if those penalties include forfeiture of company property. (Also known as “theft at the tip of the government sword.”)

  6. Gumball_Brains says:

    Teach, you are correct. Nowadays, companies offer benefits because it is expected. Not because it is something special to attract super-special workers.

    At this point, I would be happy to have an extra $4000 a year and I’ll worry about the insurance myself. My company spends over $6000 for my insurance on my behalf. They provide a “stipend” to help pay for whatever plan we enroll in. But, we are FORCED to enroll in a plan. Just give me the stipend and I’ll make my own decisions.

    Heck, I may even choose to not have insurance. (am sure that will explode some democrat heads)

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