Obamacare: Employers to Cancel Plans for Millions, Shift Costs to Workers
By Kate Randall
November 27, 2013
As the fallout continues over the cancelation notices sent to millions of people covered by health plans in the individual insurance market, it is becoming clear that millions more workers and their families are expected to lose their employer-based coverage as the Affordable Care Act is implemented.
According to the Congressional Budget Office (CBO), 156 million Americans—more than half the population—currently receive employer-sponsored health insurance. By 2016, the CBO projects that 6 million fewer people will receive employer-based health insurance compared to 2013.
Other business surveys place the number losing coverage much higher. A recent survey of 400 mid-size firms by the US Chamber of Commerce and the International Franchise Association found that 28 percent planned to drop their coverage due to the ACA.
In tandem with the legislation commonly known as Obamacare, a seismic shift is taking place in the employer-sponsored health care market, the means by which the majority of Americans who are not insured under a government-sponsored program like Medicare or Medicaid receive coverage. For those workers who have not seen their coverage canceled outright, companies are already shifting greater costs for coverage to their employees.
Workers and their families who are dropped from employer coverage will be forced to purchase coverage on the Obamacare exchanges. Under the so-called individual mandate of the health care law, workers without some form of insurance must purchase coverage from private insurers on the insurance exchanges set up under the ACA, or pay a penalty.
The debacle at the HealthCare.gov web site, where consumers can shop for coverage, may actually be temporarily delaying some employers from terminating health coverage for their workers. When and if the technical difficulties are resolved at the federal site, more companies may opt to dump their workers onto the Obamacare exchange.