While awaiting a decision from the Supreme Court on the constitutionality of the Patient Protection and Affordable Care Act (ACA) — a.k.a. Obamacare — companies of all sizes continue to grapple with the ever-increasing cost of health care benefits for their employees. According to the Kaiser Family Foundation, health insurance costs rose between 8 and 9 percent in 2011 and have more than doubled since 2001. There are, however, ways to “bend the cost curve” without waiting for the Supreme Court or Congress.
The simplest solution, of course, is simply to discontinue health care benefits. Assuming that state health insurance exchanges start operating in 2014, as contemplated in the reform law, companies with more than 50 employees would be fined $3,000 for each employee not provided with required levels of coverage. The fine, however, may be less expensive than continuing to provide health benefits. (The average cost of family coverage in 2011 was about $15,000 and single coverage was $5,500.) According to recent surveys, though, few firms plan to drop health benefits. The costs to employee morale and recruitment may far exceed the savings from dropping coverage.
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