Companies Are Already Thinking About Dumping Worker Health Benefits
When the United States government passed healthcare reform, well that is the name they put to it anyway, many rallied around believing the law was goiing to lower premiums and cover more people. The liberals quickly pounded their chests that finally everyone would get to live off the government. Well, to those who think there is a free ride, read this article about post-healthcare reform.
Many big companies, Verizon (V), AT&T (A), John Deere (DE), and Caterpillar (CAT)for example, are thinking of dropping their own paid health insurance. Instead of the traditional employer-paid plans they will give employees a stipend to buy their own insurance on the federally mandated state insurance exchanges.
The problem is the Democrats never planned on this scenario when they forced this healthcare bill upon the people. Healthcare reform may have passed but there is no denying that it polarized this country like many of the Democratic policies hailed by Obama, Pelosi, and Reid.
The evidence comes from internal company documents that Fortune magazine obtained from a congressional committee, which requested them while investigating big-corporation complaints that the Affordable Care Act would collectively cost them $1.35 billion. (Short summary: The law closes a tax loophole that let companies double-count tax benefits established by Medicare drug program.) The committee was going to hold hearings on the companies’ write-downs of this money, writes Fortune’s Shawn Tully, until it saw the documents.
What they revealed is that all four companies believed that the savings for dropping employee health coverage would far outweigh the penalties they’d owe under the reform law for doing so — about $2,000 per employee. Even if the companies gave their workers raises with a post-tax value exceeding the cost of insurance premiums, after government subsidies, that amount plus the penalty would cost far less than the corporate health benefits did.
A slide from an internal AT&T presentation tells the story. Titled “Medical Cost vs. No Coverage Penalty,” it shows that in 2009, AT&T spent $2.4 billion on health benefits for its nearly 300,000 active employees. The penalty for not covering those employees, by contrast, would be only $600 million, or 25 percent of its current spend.
Basically the Democrats have positioned this market so that the government will become the biggest supplier of insurance. Since when is the government supposed to be in "business."
What has 75 balls and screws old ladies? Bingo. What has no balls and screws everyone? The government. Geniuses.