The year is 2014, as a company your organization is doing well, but is still held back by that unsolvable problem of health care costs. You plan your normal strategy to cope, cut benefits and increase the cost sharing for employees (by the way, wellness programs have not worked).
However, this is 2014 with new problems and new opportunities. First, if you increase employee premiums too much you face penalties under PPACA. On the other hand, PPACA presents an opportunity to rid your company of the health care problem permanently, benefit many workers and save money.
Try this for an idea. You drop your health benefits coverage and at the same time give your workers a good raise. When workers purchase coverage through a new health insurance exchange (which you can help them do) many, likely the vast majority, will receive a government subsidy toward the cost of coverage giving the worker a net cost less than their former premium contribution especially for lower paid workers.
Of course, you the employer will pay a penalty for each worker who loses coverage, but that is far less than the total cost of the coverage you provided.
In lieu of a raise for workers, you could provide a lump sum payment each year to be used towards their premium share in the exchange or for out-of-pocket costs, perhaps contribute to an FSA for them. Pretty cool huh?
Employers won’t do this you say, well employers have dropped retiree coverage for people already retired, cut out spouse coverage, raised premiums to unaffordable levels for low-income workers, forced employees into high deductible health plans and all manner of creative things…this one is a no brainer, everybody wins, well, not everybody.
The long-term cost assumptions used by the government to justify health care reform are kaput. The subsidies to people in the exchanges grow beyond predictions and the federal government is left with a fiscal disaster rivaling Medicare (whose problems are not solved by 2014 by the way). Not only does the number of people receiving the subsidy increase, the amount of the increase sky-rockets because nothing has happened to control rising health care costs.
If you think I am crazy, think more about the consequences if I am not.
Related Articles
- In Health Care, No Free Lunch (theatlantic.com)
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