"I would be surprised if we see many, if any."
According to most experts, the number is small. Not only is it small, it keeps getting smaller. We speak, of course, of the number of companies with 50 or more employees that will drop employer-sponsored insurance in 2014 - opting to send employees to state-run insurance exchanges and pay per-employee fines levied by the Patient Protection and Affordable Care Act. After a
"I think this may be a tale of two markets, if you will," says
Borrowing a phrase from Mark Twain,
"I don't think employer-sponsored insurance will die. I don't see it," Galvin says, noting that while the Patient Protection and Affordable Care Act offered employers an "exit option" from providing health coverage, for many employers it's more of an "exit fantasy." Most wouldn't be able to even if they wanted.
"Turns out," Galvin says, "the government wrote a pretty smart bill," because "the government doesn't want employer-sponsored insurance to go away ... Someone's got to pay for this."
He adds that even for employers who are tempted to pay per-employee penalties rather than provide health insurance, "the math really doesn't work out. They [employers] found out that you can't split the workforce. That's a discrimination issue."
He remembers talking to one company's executives who were very excited to shed their health care costs by dropping employee coverage and sending workers to purchase care in state exchanges. "You know," Galvin recalled telling them, "you can do this, but you'd have to go to the exchange, too. You can't split the workforce."
The CFO blanched and said to Galvin, "Me? On a public exchange?"
In addition to not wanting to wade through the discrimination issues, Billet says: "I think clearly there are some employers who would likely retain coverage indefinitely ... and those would be [ones that see health benefits as] critical to attract the right type of person and [ones that] have a high-performing health plan - their costs are low, their trend lines are reasonable, they can stay under the 40% Cadillac tax that starts in 2018. If you put those two factors together, there will be some employers that fit that profile."
Galvin largely agrees, adding that employers most likely to keep offering health care benefits are in the health care industry.
There has been a glut of surveys on the topic, of course. In one of the most recent, conducted after the November election by the
The survey got responses from 593 plan administrators, trustees and organizational representatives from a wide range of companies in terms of size, sector and region.