Obamacare & Changes to Employer Insurance

Obamacare & Changes to Employer Insurance

We are constantly inundated with news about health care: changes in coverage, costs, who is covered and who is not. Sometimes, this news can fall on deaf ears, especially for those in North Carolina who have employer sponsored coverage. Many mistakenly think that ObamaCare will not affect their existing coverage.

On the contrary, McKinsey & Company, a large consulting firm, said that “30 percent of employers will definitely or probably stop offering employer sponsored insurance in the years after 2014.”  Employers in North Carolina and across the country may opt to discontinue health benefits and instead offer salary increases in place of benefits. This means employees will most likely have to switch to subsidized-exchange policies or individual plans.

What Will Cause Employers to Change Coverage Policies?

The government requires employers with 50 or more full-time employees to offer government-approved health coverage or pay a penalty for dropping coverage. Although the federal government threatens a fine to the tune of thousands of dollars, some employers in North Carolina will find that the cost of providing health care greatly outweighs the federal fines.

It is not just smaller companies who are re-evaluating their benefits packages, larger companies are feeling the pains of increased health insurance costs. Universal Orlando recently announced that they will no longer offer health benefits to part-time employees. They had previously offered a limited insurance plan for part-time workers with a low premium and caps on the payout of benefits. ObamaCare prohibits lifetime limits in any health insurance policy, meaning insurers cannot impose a total dollar limit on benefits provided. While on the surface this is a great initiative, it also greatly increases costs for employers. For some, this will mean cutting benefits they had previously been able to offer part-time or contract workers.

The Future of Employer-Sponsored Health Insurance

Not all employers in North Carolina are looking to drop coverage, however, those who don’t may look for ways to lower their health care costs. This could include methods such as:

  • Setting up their own corporate private insurance exchanges
  • Encouraging employees to lead healthy lifestyles
  • Passing more of the costs of healthcare to employees in the form of higher premiums
  • Increasing the costs for dependent and spousal coverage

ObamaCare laws will require changes in all insurance plans, not just those offered through the health insurance exchange. While lifting limits on policy benefits and establishing core benefits for health insurance plans will improve coverage for North Carolinians, it will not come without a price.

If you have questions about how your employer-sponsored health insurance may change, call Carolina Insurance Professionals for more information.