“The shift of employees to public exchanges from employer sponsored health insurance is accelerating as some businesses begin to cancel their health plans to give employees extra compensation in lieu of health benefits and provide them with assistance purchasing health benefits on the public exchange.
If a business has a large percentage of employees who earn well below $60,000, this strategy typically leaves both the employees and the employer better off. Families with incomes below $60,000 receive large subsidies on the public exchange, and the employer saves the cost of health benefits that often add 20% to 50% to employment costs for lower-paid employees…
…While few of these transitions occurred in 2014, as Forbes notes, it’s just a matter of time. The public exchanges were new last year and the employer mandate fines were not yet in effect, but now we can expect to see more movement.
Look out for start-ups such as Benefitter, which helps companies ease their employees to the public exchanges. For employers whose employees are largely at the low end of the pay scale, dropping ESHI simply makes sense, and for some employees, like those with families and earning $35,000 or under, it’s far better to be eligible to buy subsidized insurance on the public exchange.”
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