What is the Impact of the Affordable Care Act on Employer Provided Health Insurance?

I read a very interesting article today in the New York Times, called 'Envisioning the End of Employer-Provided Health Plans.'  To read it yourself click on the article name. 

The article adresses what the impact will be on the business community, regarding their practice of providing health insurance to their employees, now that the Affordable Care Act (ACA) is in place and the Health Insurance Exchanges are up and running, that offer a way for people to obtain health insurance on their own. 

Throughout the discussion leading up to the enactment of the ACA, the business community was very concerned that the cost of health care kept increasing year after year.  This concern was one of the key driving motivations for Congress to enact health care reform (along with the fact that 35 to 40 million Americans do not have health insurance).  But now that the Health Insurance Exchanges are in place, business now has a choice as to whether they continue to offer health insurance to their employees or give their employees a stipend to pay for health insurance and have them go on the Exchange and purchase it themselves. 

The article does a nice job in laying out the pros and cons of this decision.  I'm sure the decision will be decided to a large degree based upon cost.  Does it cost business more or less to continue to provide health insurance to their employees versus paying a stipend to employees and for large business, paying a penalty to the federal government for not offering insurance?  What is the administrative cost to employers of providing health care, or potential savings?

In a new report by S&P Capital IQ, that is highlighted in this article, they say that America's biggest companies could save $700 billion between 2016 and 2025, if they shifted their health care to the Exchange.

But this raises new questions.  What would the company do with this savings?  Would they use the savings to give higher wages for the employees or just increase the bottom line?  Would this make American companies and Michigan companies more competitive?  Would the stipends be enough for employees to buy the Silver or Gold plan on the Exchange or just the basic Bronze plan?

The Affordable Care Act was enacted will clear goals and intentions.  But nobody can clearly predict what can happen when major reforms take effect.  It will be very interesting in the new few years, to see how the Affordable Care Act changes the role of employers providing health care. 






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Health Care for Michigan
To promote health care reform and renewable energy.