If the Supreme Court upholds the Affordable Care Act, will employers decide to offer coverage to employees or pay a fine? If the justices strike down the law, will employers start cutting benefits that have already kicked in, like preventive screenings with no co-pays and coverage for children up to 26-years-olds?
Chantel Sheaks of Buck Consultants advises companies on health care issues. She says it’s often a numbers game.
Under health care reform, most companies with more than 50 employees must offer insurance, or face fines of $2,000 per employee. Some companies might decide that it would be cheaper to pay that fine than offer benefits. For example, Sheaks says companies with a low-paid or transient workforce might be better off paying the fines.
But even companies that offer benefits to their employees could be hit with fines. The government will fine companies $3,000 for each employee who opts into a government-subsidized “insurance exchange,” instead of their work-sponsored plan.
Sheaks says the insurance exchange might offer better coverage at a lower price than the company offers. The $3,000 fine encourages companies to stay competitive with the exchange. But Sheaks says some companies may decide that it’s more cost-effective to pay these fines than to offer the plan.
Will More Employers Offer Insurance?
After Massachusetts adopted its universal health care law in 2005, the percentage of employers offering coverage to employees went from 69 percent to 76 percent in 2010.
Sheaks says Massachusetts might not be the best example for the rest of the country, because it has a highly-trained and competitive workforce. In other parts of the country, employers might not need to offer insurance to remain competitive in their industries.
Beyond The Numbers
However, companies are considering more than dollars and cents when it comes to offering health care coverage.
The health care consultancy company, Avalere, conducted a study last year that found companies offer insurance to boost productivity and to retain and recruit employees. But the study also found that some companies consider it a moral obligation:
…there are many intangible reasons why employers offer coverage to employees, such as the value employees assign to the benefit, and the feeling amongst some employers that offering health benefits is the “right thing to do.”
Even if the Supreme Court strikes down the Affordable Care Act, some employers may find it difficult to take away benefits that have already been given under the law.
“Once you give someone something, good luck taking it away,” Sheaks said. “Not gonna happen.”
- Chantel Sheaks, principal at Buck Consultants