A compelling question: Will employees ask small employers to drop health coverage?

Joseph Burns

About Joseph Burns

Joseph Burns (@jburns18), a Massachusetts-based independent journalist, is AHCJ’s topic leader on health insurance. He welcomes questions and suggestions on insurance resources and tip sheets at joseph@healthjournalism.org.

Brian Kalish posed this question in an article in Employee Benefit News on Sept. 24. Kalish was quoting Rodger Bayne, president of Benefit Indemnity Corp., of Towson, Md., who was a speaker at the Benefits Forum and Expo, a conference in New Orleans.

“In the not-so-distant future small employers may stop offering employer-sponsored health coverage because employees will demand it,” Kalish reported. Low-income employees who get employer-sponsored coverage might be eligible for subsidies on the exchanges, making the exchange coverage more attractive than their employer-sponsored benefits, he wrote.

Not only are the exchanges advantageous for employees of small businesses, but they are attractive for similar reasons to large employers with part timers, particularly low-wage workers eligible for subsidies.

Grocery retailer Trader Joe’s said it will move part timers working fewer than 30 hours a week to private exchanges on Jan. 1 and give them $500 a year instead of the fairly generous benefit plan they have now, as Dave Jamieson reported in The Huffington Post. Sarah Kliff at The Washington Post’s WonkBlog explained that Trader Joe’s part timers might be better off in the exchanges if they qualify for subsidies under Obamacare. As Kliff has reported, employers do not get penalized if they do not provide health insurance coverage to employees working fewer than 30 hours a week.

Home Depot announced that it will move about 20,000 part timers to the public exchanges, according to Bloomberg’s Chris Burritt. Quoting Robert Laszewski, a health insurance consultant, Burritt said low-wage employees may find better options on the exchanges. But, he added, such movement to the exchanges is an unintended consequence of the Affordable Care Act. “Obamacare is predicated on employers maintaining coverage,” Laszewski told Burritt.

David Markiewicz, in The Atlanta Journal-Constitution, explained that because Home Depot was eliminating a limited medical insurance plan for part-timers, it was forcing these workers to the public insurance marketplaces. And, again, the part-timers would get better coverage and premium subsidies on the exchanges, he added. Home Depot will continue to offer part-timers dental, vision, life insurance, short-term disability insurance, and hospital indemnity and critical illness plans.

Jim Doyleat the St. Louis Post-Dispatch had a strong local angle to this trend in an article last week. The largest employer inSt. Louis, BJC Healthcare may be preparing to cut health insurance benefits for some part-time workers, he wrote, citing nurses in the BJC system. BJC itself had not confirmed the move, but employees told Doyle that the health system’s efforts to revise its benefits for part timers on flexible schedules was a dilemma because some work 10 hours one week and 30 hours the next week.

For health care journalists, the trend to watch is whether this movement by some companies portends a larger shift to exchanges and away from employer-sponsored coverage altogether.

For more on the topic, see Joanne Kenen’s Aug. 7 blog post, “Drill down for real stories about health reform and employment.”

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