Surprising Positive Impacts of Employers Dropping Healthcare Coverage

Nicole Fisher, a contributor to Forbes (see article link, below), delivers a relevant and thought-provoking opinion piece on some benefits of employers dropping healthcare coverage beginning in 2014. The piece brings up important points for employers who are thinking about eliminating employer-sponsored health insurance.

First, Fisher points out that employers will drop employer-sponsored health coverage, leading to an overall reduction in employer-sponsored health insurance. What she doesn’t explicitly point out is that for employers with average worker salaries under about $60,000, dropping health insurance may be:

  • Financially better for the employer, even with the $2,000 shared responsibility payment “headwind”
    Financially better for most employees and their families, who may receive large premium tax credits from the government to cover health insurance

Second, Fisher explains that “dropped” employees will purchase insurance on the quickly evolving individual market. In 2014, no employee will be turned away from the individual market for a pre-existing condition, and employees and their families will be more likely to achieve better portability of their healthcare coverage if they experience a job loss or a job transition. This is important to many employees and their families because it provides continuity of care (i.e., they don’t have to switch doctors).

Third, Fisher highlights that increasing the number of employees purchasing insurance on the individual market may lead to more consumer-oriented behavior, both in the purchase of insurance, and in the subsequent purchase of health services. This consumer-oriented purchasing behavior, in turn, may lead to decreased utilization of unnecessary health services, and ultimately may lower health costs and improve pricing transparency.

Here at Benefitter, we recognize there are several reasons why many employers and their employees would be better off without employer-sponsored healthcare insurance. But we also know that it’s not an easy decision for an employer to eliminate health insurance. Nor will it be a simple transition for workers to begin purchasing insurance on the individual market. That’s why Benefitter provides software solutions for employers to understand their options and establish a plan, reimburse their employees to “make them whole,” and help guide their employees to the individual market.

To learn how Benefitter can help you and your employees navigate healthcare reform, visit our website at

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SOURCE: Forbes, Nicole Fisher Article: Employers Dropping Health Care Coverage Could Benefit Health Care Quality and Cost, February 2, 2013 —