Are employers dropping health insurance?

May 17 01:00 2016 by ushadmin

The federal Affordable Care Act includes penalties for large employers that don’t offer quality health insurance coverage.

So, passage of the law raised what came to be known as the “pay-or-play” question.

Would employers simply “pay” the fine and opt out? Or, would they continue to “play” the health insurance game?

A report this month from the consulting firm Mercer is the latest to suggest the answer for most is: Play.

In a write up of its annual survey of employer-sponsored health plans, Mercer said that survey results have consistently shown a commitment by large employers to keep offering health insurance benefits. It was a different story with small employers, but Mercer says even that’s starting to change.

“Only 7 percent of employers with 50-499 employees now say they are likely to drop their plans within the next five years, down from 21 percent in 2013,” the report states. “Among employers with 500 or more employees, just 5 percent say they are likely to drop their plans, essentially unchanged from 4 percent in 2014.”

If you’re curious about the enforcement mechanism behind the “pay or play” aspect of the health law, here’s a story we did in the Star Tribune a few months ago about the vast amount of paperwork that’s now being generated by insurers and employers to document who has access to work-based coverage.