Compensation And Benefits
MBA 735
The article I chose called ‘Obamacare And The End Of Employer-Based Health Insurance’
deals with the relationship between Obamacare and employer-based health insurance. The
author states that according to the American Action Forum, 43 million American workers
will lose access to employer-based health insurance coverage because of Obamacare.
Critics of the Affordable Care Act (ACA) have warned that the creation of health insurance
exchanges, and federal subsidies for people earning less than 400% of the federal poverty
limit, practically invites employers to stop offering coverage to their employees, so the
federal government picks up the tab.
One study mentioned in the article done at the University of Michigan analyze trends and
employer-based health insurance coverage in the US from 2000-2011. A trend they saw
showed that big companies with 100 or more employees have consistently offered health
insurance to their employees over this period of time. The author explained why health
insurance makes so much sense for big companies. Large companies are able to negotiate
lower premiums with insurance companies because they have sufficient number of
employees to reduce their actuarial risks.
Another trend showed that insurance coverage from small and medium companies dropped
dramatically over the past decade. This trend appears to be directly related to how well the
company’s pay their employees. The analysis done shows that there’s a huge difference in
health insurance coverage, with low-wage companies. As more employees work for lower
wages, they also end up working for companies unable or unwilling to offer them health
insurance coverage. The team running this analysis predicts that things won’t change much
for the majority of the Americans, who currently receive health insurance coverage from
the government or from large employers. On the other hand, things get more complicated
for small and medium employers. Employers with 50 or fewer employees will get a new
tax credit for me ACA if they offer insurance to their employees. It is the median size
employers to have to balance the benefit of offering insurance to their employees between
the tax breaks and avoidance of new penalties vs. the price of the insurance coverage. Here
again, for high wage earners, they don’t expect to see many problems. The ACA however,
may accelerate earlier trends for low-wage workers.
The second article I chose called ‘How to Control Health Care Costs’ focuses more on
what employers can do to manage their health-benefit costs. The article points out
employers have done so well at controlling per employee health benefit costs that the 2012
