Employers will derive no advantage from ending group health insurance coverage for their workers under the Patient Protection and Affordable Care Act (PPACA), according to a new report.
Employers might pay as much as $17,269 per employee for the decision to end sponsored group health coverage in favor of subsidized coverage through a government exchange, about $9,000 more than they currently pay, indicated a new white paper from Truven Health Analytics.
Businesses that eliminate group plans with no subsidy would pay penalties of about $2,000 per person. While that would seem to be preferable on the surface, companies that end coverage would likely find themselves passed over when skilled workers are looking at job opportunities, the report notes. While the penalties might cost less, employers receive no benefit in return for paying them. Providing employee benefits can have advantages in terms of talent recruitment and retention, as well as improved productivity from healthier workers.
Eliminating group health coverage is not cost efficient and would likely hand an advantage to competing businesses, the report concluded. As a result, most companies will likely maintain their current plans.
