While many may feel like the 2014 deadline for pay or play employer-backed health insurance is too far away to worry about. However, now may be a good time to consider whether or not a business should continue to offer employee benefits when health insurance exchanges take effect in January of that year, according to CFO Magazine.
A recent survey conducted by McKinsey & Company found that 30 percent of business owners polled reported that they would indeed drop employee worksite benefits for healthcare after 2014. The companies polled covered a wide range of profiles, from small businesses with 20 employees, to conglomerates with 10,000 or more staff members.
Those who do decide to forgo employer-sponsored healthcare will face a penalty of approximately $2,000 per employee, according to CFO Magazine. When companies consider the high costs of health insurance premiums, this may not seem quite so unmanageable.
"Over the past year I've talked to many CFOs about pay or play, and more often than not they've said that the annual penalty is less than what they're paying now," explained insurance expert Ed Bray, the source reports. "But when you do all the math, those numbers can get very close."
However, Bray also warns that dropping benefits may have a negative impact on recruitment and employee retention, according to the source.
