When health exchanges emerge in 2014, new analysis indicates this will be the exit point for several employers to get out of the health benefits arena. In fact, according to a study from research and consulting firm Market Strategies International, there will be an estimated net 10 percent reduction in access to employer-sponsored health benefits.
"The results are eye opening and could severely impact a sizeable number of US workers and their families," said Susan McIntyre, senior vice president in the company's Health Care Division, in a statement. "We're talking about potentially 10 million people no longer having access to health benefits through their employers in 2014. A significant number of employers are telling us that, with health care reform, it may not benefit them competitively to offer employee health care benefits. The reality is that companies of all sizes are reviewing their options and considering reductions."
McIntyre added that both small and large companies view exchanges as potential to "exit the health benefits arena without leaving employees lacking in coverage options. For some large firms, in particular, there is a desire to pay to walk away.
Recommended For You
"Beyond the planned exodus by some firms is the potential for other companies to drastically restructure their workforce," McIntyre said. "There will be strong economic and competitive forces driving some employers away from full-time employees, in favor of more seasonal workers, part-time workers or contractors. Looking at beginning or increasing off-shoring is another option."
Some notable findings regarding 2014 employer health benefits intentions:
Among companies currently offering health care benefits (covering 92 percent of all workers):
- 76 percent will continue to do so
- 15 percent will offer coverage to some full-time employees
- 9 percent will stop doing so
Among companies currently not offering health care benefits (covering 8 percent of all workers):
- 28 percent will begin to offer them in 2014
- 19 percent will begin to offer coverage to some full-time employees
- 53 percent will not begin to offer health care benefits
- Taken in total, there will be an estimated 10 percent net decline in access to employer-sponsored health benefits as of January 2014. (13 percent of U.S. workers will lose employer-sponsored benefits; 3 percent will gain employer-sponsored benefits.)
More than half (55 percent) of small business owners in a separate survey done by Discover say they favor the repeal of health care reform, and 47 percent say they're considering dropping their health benefits because the cost is too high.
"Small business owners are suffering from rising health care costs, and according to the survey, most don't believe the current law is the solution," said Ryan Scully, director of Discover's small business card.
The Department of Health and Human Services announced this week it's boosting funds to help states set up their exchanges. The department says states will have multiple opportunities to apply for "exchange establishment grants," and that states that are moving at a faster pace can apply for multi-year funding, while states that are taking a step-by-step approach can apply for funding for each project year.
States can use the grants for things such as background research, regulatory changes and information technology systems.
The department has already allocated funding for state exchanges, with $49 million in grants awarded in July 2010.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
