April 06, 2013

Thanks to Obamacare, you may say goodbye to your employer's health care

And, no, that's not some wingnut think tank saying that.

The very insightful Doug Henwood of Left Business Observer notes that a lot of businesses will opt out of continuing to offer their employees insurance next year.


The $2,000 per employee penalty is less than half their annual per-employee cost for their share of health insurance, on average.
Ah, vindication. Financial Times has has a front-page piece (“US business hits out at ‘Obamacare’ costs”) confirming the central point of the (2011) McKinsey survey: for many employers, it will be much cheaper to pay the penalties than cover full-time workers, and cut the hours for others so they fall under the definition of full-time and then don’t have to be covered. Retailers and fast-food chains are the most likely to do that, but there’s no reason that many other employers wouldn’t join in.
CEOs of Kroger, Dunkin Donuts and other companies go on the record about this and more. Henwood, though he's not gloating now, predicted this outcome nearly two full years ago.

Beyond retailers and fast-food chains, I'd predict any work field with fairly high turnover rate and fairly low training or skills requirements will consider this.

Call centers, telemarketers, customer service centers, all come to mind.

But, what about the "backlash," you say? After all, the FT story notes the backlash against Darden, owner of Olive Garden, et al, when it broached ideas like this in February.

Ahh, but if businesses implement at least parts of this, i.e., moving full-time work to part-time, by attrition, by hiring part-time replacements for full-time people who leave, it will all be under the radar screen.

Then, many now-unconvered individuals will either pay the individual penalties, or gamble on not being caught, rather than pay what might be more out of their own pocket than before for health insurance. That, in turn, means not just the restaurant worker sneezing in the kitchen at Olive Garden, but the produce stocker sneezing in the lettuce at Kroger rather than stay home sick.

Beyond that, to mount another hobbyhorse of mine again, without a Federal Department of Insurance to regulate the biz, a lot of this flim-flammery will go unchecked.

And, if you're lower middle class and without insurance right now? Obamacare sounds great on paper. But ... paper's going to be part of the problem for people unaccustomed to the paperwork that insurers will snow them with. CJR has the extensive details on what this will probably be like, as America's Health Insurance Plans is surely loving this part of the self-gifting of the Obamacare it helped create.

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