Some Employers Switching To Stipends For Non-Group Coverage
The Wall StreetJournal on Tuesday examined how some small- and medium-size employersare providing stipends to workers who purchase their own health coveragethrough defined contribution programs, including contributions to healthsavings accounts. According to the Journal, "By adopting suchstrategies, employers aim to shield themselves from premium increases andreduce administrative burdens, while providing employees with help toward theirmedical expenses, a key element for recruiting and keeping staff."
Sam Gibbs, a senior vice president at eHealthInsurance Services, said the trend represents a"paradigm shift from employer-sponsored plans to employee-ownedcoverage."
However, critics contend that individual policies carry challenges that workerswith health problems would not face under a group plan, such as costly premiumsand coverage exclusions of pre-existing medical conditions. Critics also saysuch employees could "wind up without insurance in the state-regulatedindividual market," the Journal reports (Knight, WallStreet Journal, 1/29).
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