Employers: Stick with status quo on paying for health insurance

Jane Sarasohn-Khan at Health Populi writes, “a new survey from the International Foundation of Employee Benefit Plans finds that most employers do not want to move away from an employer-based system of health insurance.”


More than a few business people have had a tough-go of things lately; it seems obvious, then, that businesses would want to unload an ever-increasing expense line item from their budgets.


Not so fast.

Sarasohn-Khan continues:

As one of those who’ve watched the slow-cooking past efforts toward changing the structure of health care financing and delivery in the U.S. — and given the current sorry state of the macroeconomy — employers who “can” will continue to sponsor health plans for the next couple of years.

“Employers who can” depends on company profitability per employee, and clearly many companies whose good fortunes are based on consumer purchases could become compromised in their ability to provide health insurance. Milliman, the actuarial firm, calculates that the average cost of health care for a family of four in 2009 will be $17,310. This will over-burden companies in many consumer-facing industries — beyond automakers, consumer goods companies, retailers, home appliance manufacturers, and others from a large number of SIC codes.

It is baffling to read that “64% of employers believe that employer-based health care should continue to be the primary mechanism for benefits delivery,” even if that number has been decreasing over the past ten years.

No doubt that any health care reform in the near term will require employers to pick up some of the tab, but do employers fear that employees no longer needing the one benefit that keeps them on the job will up and leave en masse?

The era of one company, one career has long been dead.  The final frontier in overcoming job lock is the health care benefit and the now defunct John McCain health care plan at least had the redeeming quality of separating health insurance from employment.

Not only is divorcing health care insurance from employment the right thing to do, it also makes business sense from a financial perspective.  Or so I thought.

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