Some US Employers Ending Group Health Insurance Plans
Some employers are endinggroup health insurance coverage for workers and instead are offering employeesfinancial contributions to purchase individual coverage -- a trend that if"broadly adopted ... would represent a fundamental shift in health coverage"in the U.S., USA Today reports. According to USAToday, the trend is "touted as a lower-cost way for employers tooffer workers some kind of health coverage, while making smaller and morepredictable" contributions toward that coverage. Employers using the modeltypically contribute between $50 and $200 to a tax-free account that workerscan use for health care costs.
Paul Zane Pilzer of Zane Benefits -- a company that sets up andmanages tax-free medical reimbursement accounts for clients' employees -- saidunder the model, more workers will be able to purchase health coverage on theirown, and healthier employees will pay less for individual coverage than theywould under an employer-sponsored plan because they would no longer "haveto pay for sick employees."
However, critics of the trend say shifting employees to individual policiescould benefit younger, healthier workers who often have lower premiums andlower medical costs, while leaving older and sicker workers unable to obtaincoverage. USA Today reports that "ending group coverageremoves a key protection in group insurance plans": Insurers cannot rejectgroup plan members for health reasons, and all members of the group pay thesame premium.
In addition, Sara Rosenbaum, a law professor at the George Washington University School of Public Health, said proponents of individual policies might mislead employers into thinking that group and individual coverage are the same. Rosenbaum said, "Many employees may find themselves shut out of the individual market, and even if they can get in, the coverage is dramatically less than what they can get in group products." According to Rosenbaum, financial contributions to individual policies "may be somewhat helpful for workers in businesses that have never been able to offer insurance coverage," but it is a "radical step backward" for companies that cancel group coverage (Appleby, USA Today, 1/24).
Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.