Em­ployer health care likely to stay

In­sur­ance seen as key to hir­ing, keep­ing work­ers.

Austin American-Statesman - - MONEY & MARKETS - By Lau­rie Kell­man and Joyce M. Rosen­berg

Get your in­sur­ance WASH­ING­TON— through your em­ployer? The on­go­ing po­lit­i­cal tur­moil around “Oba­macare” all but guar­an­tees you’ll still be able to do that.

Ask Walt Rowen, whose busi­ness is etch­ing glass but whose ex­pe­ri­ence manag­ing cen­tury-old, fam­ily-owned Susque­hanna Glass makes him some­thing of an ex­pert on health care. He’s pro­vided cov­er­age to em­ploy­ees, then can­celed it, steer­ing them to the health in­sur­ance ex­change. But with those premi­ums ris­ing, Rowen this year is again cov­er­ing his 70 or so work­ers un­der the um­brella of em­ployer-spon­sored health in­sur­ance.

Em­ployer-pro­vided health in­sur­ance is so in­grained in the Amer­i­can work­place that peo­ple ex­pect it to con­tinue even as politi­cians thrash out the role of gov­ern­ment in health care. That’s ac­cord­ing to polling, busi­ness own­ers and con­sumers. And in a nearly sat­u­rated labor mar­ket, em­ploy­ers don’t want to give work­ers a rea­son to work some­where else.

“I think a com­pany — any size com­pany — would be in­cred­i­bly afraid to just can­cel its in­sur­ance pol­icy and say the hell with it,” says Rowen, whose com­pany is in Co­lum­bia, Penn­syl­va­nia. He said that could re­sult in em­ploy­ees flee­ing, es­pe­cially in states where the Af­ford­able Care Act in­sur­ance mar­kets are weak.

With the GOP cru­sade to re­peal and re­place “Oba­macare” fail­ing, the fed­eral man­dates that peo­ple have in­sur­ance and that em­ploy­ers with more than 50 work­ers pro­vide it seem likely to stay in place in the fore­see­able fu­ture. The Trump ad­min­is­tra­tion on Tues­day pledged to keep work­ing with Congress on a re­write. “Oba­macare’s man­dates sad­dled many with health care costs they sim­ply couldn’t af­ford,” said White House spokes­woman Sarah Huck­abee San­ders.

For now, the Trump ad­min­is­tra­tion is con­sid­er­ing whether to con­tinue pay­ing the law’s cost-shar­ing sub­si­dies, which have helped lower premi­ums. With­out those sub­si­dies, it’s es­ti­mated that premi­ums will rise and in­sur­ers will leave mar­kets.

The ACA re­quires com­pa­nies with 50 or more full-time em­ploy­ees to pro­vide in­sur­ance to em­ploy­ees and their de­pen­dents. The Kaiser Fam­ily Foun­da­tion says nearly 96 per­cent of com­pa­nies of that size al­ready were of­fer­ing cov­er­age be­fore the law took ef­fect in 2014. Nearly 35 per­cent of com­pa­nies with fewer than 50 work­ers also were of­fer­ing in­sur­ance.

Re­mov­ing the em­ployer man­date wouldn’t sit well with a wide swath of the Amer­i­can pub­lic. A poll by The As­so­ci­ated Press-NORC Cen­ter for Pub­lic Af­fairs Re­search says 61 per­cent op­pose re­vok­ing the re­quire­ment, in­clud­ing 58 per­cent of Re­pub­li­cans.

Work­ers have been get­ting their health in­sur­ance through their em­ploy­ers for decades, since the U.S. gov­ern­ment ex­empted em­ployer-paid health ben­e­fits from wage con­trols and in­come tax dur­ing World War II.

Nearly 90 per­cent of work­ers are in com­pa­nies that pro­vide health ben­e­fits, ac­cord­ing to the Kaiser Fam­ily Foun­da­tion/HRET an­nual sur­vey in 2016. Tak­ing into ac­count de­pen­dents, roughly half of Amer­i­cans are cov­ered by em­ployer-based in­sur­ance.

Large com­pa­nies “need to at­tract and re­tain em­ploy­ees and they’d be at a com­pet­i­tive dis­ad­van­tage if they stopped of­fer­ing health ben­e­fits,” said William Kramer, ex­ec­u­tive direc­tor for na­tional health pol­icy for the Pa­cific Busi­ness Group on Health.

As a re­sult, hu­man re­source con­sul­tants say it’s likely that busi­nesses will keep of­fer­ing cov­er­age. Some ex­perts ques­tion whether the ACA’s em­ployer man­date makes much, if any, dif­fer­ence when there’s a solid busi­ness case for pro­vid­ing health care: With un­em­ploy­ment low and the labor mar­ket tight, ben­e­fits help em­ploy­ers in re­cruit­ing and re­tain­ing the best work­ers.

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