In a stunning revelation Wednesday, several top U.S. corporations are seriously considering dropping employee health insurance coverage in light of what they see as the inevitable consequence of ObamaCare--skyrocketing costs.
(PRNewsFoto/Verizon).
The companies state that after their legal experts poured over the thousands of pages in the new law, it will cost them less to pay the fines for not providing healthcare coverage for employees than continuing to provide employer-paid health insurance benefits.
As a side-note to the announcement, the companies maintain that ObamaCare will result in a dramatic increase in expenses for providing employee coverage, with added costs skyrocketing to multi-billions of dollars.
According to Business Record:
Additionally, the penalties to businesses for not offering coverage are less expensive than the cost of providing insurance, she said. "But for those that aren't providing coverage now, this is a huge burden to them. And for employers that have a lot of employees working 30 hours (the threshold to be considered full- ime), you may have a lot of businesses cutting them back to 29 hours."
Business Record maintains that despite this fact most companies will probably try to continue to provide coverage.
But a report issued today in Fortune Magazine and reported by CNN indicates that the dire warnings of ObamaCare critics concerning the consequences of approving the costly legislation are in fact well-founded.
The report points to internal documents from AT&T, Verizon, John Deere, and several other large corporations which show that executives are, in fact, looking at the option of dropping healthcare coverage for employees due to what they are sure will be unsustainable increases in costs. These costs will be so prohibitive that it would benefit the corporations to pay the government fines instead:
Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill's critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.
That would dismantle the employer-based system that has reigned since World War II. It would also seem to contradict President Obama's statements that Americans who like their current plans could keep them. And as we'll see, it would hugely magnify the projected costs for the bill, which controls deficits only by assuming that America's employers would remain the backbone of the nation's health care system.
Hence, health-care reform risks becoming a victim of unintended consequences. Amazingly, the corporate documents that prove this point became public because of a different set of unintended consequences: they told a story far different than the one the politicians who demanded them expected.
This information will most certainly be added motivation for those who are intent on repealing ObamaCare following the November 2010 midterm elections, or at the very least refusing to fund the program which was passed by Congress as an appropriations measure.
For commentary on the issues of the day, visit my blog at The Liberty Sphere.
Comments
A stunning revelation? Where have you been?
sounds like more fear peddling
This is exactly what the Obama Adminstration wanted. Like Nancy said..."you have to vote on the bill to see what is in it."
The legislation was structured so as to force the big companies TO DISCONTINUE PROVIDING HEALTH CARE FOR THEIR EMPLOYEES. They are in business to make profits for stockholders. This legislation will change their bottom line significantly, thus they will opt out and SHAZAM....UNIVERSAL HEALTHCARE.
Daniel--stunning in the sense that the uninformed citizens never expected it. After all, 'Dear Leader' said it wouldn't happen!
Tom--Right. I think the 'unintended consequences' were not actually 'unintended.'
First of all, don't you think shareholders of those companies should be enraged if management wasn't evaluating the potential costs and benefits of the system? That they did it really isn't news at all.
But more importantly, we can only hope that employers do stop providing coverage. There's nothing we should want more than to relieve employers from the burdens of the health insurance racket. Since there's a real first mover disadvantage here it probably won't ever happen cold turkey. We could get there though by allowing all employers into the exchange, starting up a national plan (i.e., the "public option"), and letting the market work its magic. What a great day that will be!
A stunning revelation? Where have you been?
AT&T is taking a $1B charge because of HR3590. The law adjusts the government subsidy (real money given) for retiree drug coverage. 2003 law provides for the govt. to reimburse to AT&T
.28 for every dollar they spend + .28 for every dollar retiree spends + they get to deduct the total amount they spent on pres. drugs on their taxes. Health care reform allows them to only write off 72% (accounting for the subsidy) on their taxes. This tax hike is one of the ways businesses are impacted. Why was the govt. paying 28% of a retiree's prescription drug cost anyway? Sounds like the govt. has had their nose in private health care longer than any of us realized. Financial gurus believe this will raise $4.5 billion over 10 years in added revenues by closing this loophole for large companies. No wonder big companies lobbied so hard against health care reform. AT&T posted profits last year of $12B.
My husband's co sent a paper in the pay checks last week talking about how, if you can't afford insurance premiums through your employer, that you may qualify for the SCHIP program. It was ominous. It's as if they were saying, "Some of you won't be able to keep paying in the near future when the rates skyrocket".
lg--It was the average American citizens who lobbied hard against the government takeover of healthcare known as ObamaCare. Just as we were right about the consequences to corporations and small businesses too, we will proved right about the many other disastrous effects--death panels and all. Government healthcare is a failure all over the world, and anyone who tells you otherwise is lying through their teeth.
Marie--exactly. That's the whole point. These Marxist thugs who run the country WANT private insurance to fail. They WANT government healthcare so they can control our lives. THAT is the end-game.
OBAMACARE! No matter how hard he tries, you can't cure stupid. Barack Hussein Obama is a danger to himself and an even BIGGER DANGER TO THIS COUNTRY in many ways.
get real. the corprocrats have been looking for excuses to dump employer health insurance for years; they've quietly lobbied for a single payer universal system since at least the bush I administration and were behind the clinton effort.
just like they've been killing defined benefit retirement plans and pushing folks into 401k's, they want to get out of the health insurance business because ~~ most of them do not actually buy insurance ~~ they hire insurance companies to manage their self-insured plans.
All you morons voted for his "hope & change" line=SUCKERS! Now you're bringing all of America down!
Janine--you tell 'em about it!! Good going! :)
And the liberals/governments response to this will be:
"Look at what those evil greedy companies are doing to the American people! We should get rid of them."
Tim--correct. They use that common ploy to deflect attention from government's greed.
Example--big oil companies make about 3 cents per gallon in profits on gasoline sales. Government--local, state, and federal, make 40 cents per gallon or more (depending on the area of the country) from gasoline taxes.
So WHO is making the 'windfall profits' off of oil?????
Right Anthony... The actual profit that insurance companies make is little more than grocery stores: 3% to 5%, in spite of what is being said about profits. Anyone who runs a business will tell you about all the expenses that must be paid with all those "profits". Companies for years have incentivized employement in their organization with health insurance as a perk, a win-win for everyone.
More unintended (if that is the right word) consequences, If this bill does go into effect, how will it change the American workplace? I shudder to think!
The Lying Radical Leftists who shoved this mostrosity down America's throat should be dragged from office and jailed.
SDKitty--Right. This Administration, along with Democrats in Congress, love to demonize oil companies, Wall Street firms, etc. for their 'obscene profits.' Obama even said the other day that at a certain point 'you've made enough money.' Yet these very same vermin profit from the very companies they demonize! And to boot, government makes windfall, obscene amounts of money from the taxes it collects from these entities.
To rephrase Obama's Marxist statement, 'At a certain point certain individuals in government have engaged in too much corruption and too much trashing of the Constitution.'
Time to throw the bums out in November and begin impeachment proceedings against Obama!
Sounds like the "chickens are coming home to roost" for the demoncraps and their unconstitutional Health Care Deform Bill. Personally, I can hardly wait for the "tar and feathering" parties to start. Been wanting to do that to numerous politicians for 2-3 decades now.
It is a stunning revelation only if you have no sense of business. Congress incentivized this precise behavior. Obama and Democrats lied through their teeth about the goal of the health care bill- and that was to destroy the private insurance industry. Government will step in with its controlled universal single payer system once all the plans are dropped.
Buckle up- this is the future of ALL us industry.
The beauty of this (it is a terrible beauty to behold!) is that OPEN ENROLLMENT PERIODS are ahead of the NOVEMBER ELECTIONS. That could mean that people are getting notice that there will be NO open enrollment, because Obamacare made it TOO EXPENSIVE to keep them in Health Insurance. The good swift kick in the teeth will gt the attention of a LOT of people at just the right time.
So if you know anything about Obamacare and the costs they are trying to hide, bring those TRUTHS to Light and keep on doing it. The Liberal Mouthpieces are likely to be working overtime to try and spin this away into a reason FOR universal healthcare. If you sit still and stay quiet, they may succeed with their LIES!!! Keep fighting! DON'T TREAD ON ME!!!
WE TOLD THEM SO!
It is a stunning revelation only if you have no sense of business. Congress incentivized this precise behavior. Obama and Democrats lied through their teeth about the goal of the health care bill- and that was to destroy the private insurance industry. Government will step in with its controlled universal single payer system once all the plans are dropped.
Buckle up- this is the future of ALL us industry.
Clearbrook, you're exactly right about the open enrollment periods and the election timing...
... but given the gag order slapped on health insurance providers by HHS, and the (aborted) threat to call company execs before Congress (ala the McCarthy hearings) for announcing charges against earnings (as required by Sarbanes-Oxley), how much do you want to bet that Congress will find a way to "encourage" companies to delay announcing these changes until after the election date?
These large companies are heavily regulated by, and do a lot of business with the government - trust me, there *will* be tremendous pressure brought to bear...
And Tom, destroying private health insurance was the intent all along - they just lied about it. Thing is, look at how much money Medicaid/Medicare leak; they gush cash faster than all the oil wells in the Gulf - it's the most expensive, least efficient system on the planet. And *that's* the model you think we need???
You guys are hilarious. It's obvious you've never studied the health care system beyond whatever bunk Fox News/WND/etc. is feeding that day.
or the calendar, tom. they seem to have missed that all these horrors won't happen until 2013.
... so those billions of dollars in write-downs taken by companies already, removal of pre-existing condition exclusions for children, mandatory coverage of children under family coverage until age 26 - those all happen this year, and are all 'free', right? You do know the definition of 'insurance', right? It's not "Everything's free", you know, it's a shared risk pool - anything that increases the risks of payouts increases premiums.
Whenever a liberal doesn't have anything intelligent to say, you can be sure that the next words that dribble out of their lips include the phrase "Fox News" and a gratuitous ad-hominem attack - it's like kindergarten all over again, only instead of "cooties", it's now "Fox News".
Pathetic.
Toldja so.
It amazes me how damn stupid people are to believe that this obombacare can be so great. He's not my president, I didn't vote for this alleged president because I paid attention to what he was saying unlike the other idiots out there. I guess character doesn't matter to anyone anymore.
I question the interpretation in this article. Health care costs are going up _anyway_, not just because of anything in the Obamacare legislation. The problem is that the incentive is to just pay the fine because its cheaper; many Americans are going to make that choice too, not just these big companies. This incentive exists because subsidies that went to big companies to provide health care are being phased out by Obamacare to reduce the deficit. Now Verizon and those other companies have to pay the _real_ cost of rising health care.
BULLSHIT
this is what you get when you vote for a candidate using empty words.
@Clearbrook: You got it wrong. Open enrollment is before elections. Dems will use the oppurtunity to say how corporate is evil and project how Dems win they will get the Single payor system to cover for all and thats going to sway people's opinions. Remember there are still people who actually feel the Govt run healthcare is a good option!
This is EXACTLY what the Traitor-in-Chief had in mind.
IMPEACH OBAMA!!!
They coined the phrase years ago "Just Say No". No to their unconstitutional tax and spend programs and no to their enforcement! They will be know by their fruits. They and the fruit they bear are rotten and both need to be thrown into the trash bin of history like the tyrants and their agents who've gone before.
the goal also is to rgulate small buisiness and kepp them small(under 30 employess)by making them pay fines or provide healthcare, while allowing giant international cos to pay a fine(much less than doing the right thing) and drop healthcare for theyre employees.take a look at socialist europe and greeceand iceland.this is the future these criminals like obama and his boss rahm the mossod agent emanuel have in mind for us.
Come on folks ...put the remote down....Fox Noise is not a news station its a commentary only broadcast station with a conservative point of view only that is fear based to say the least. Put the remote down and hug your kids...get a life...please!
My employer has already told us they are considering dropping healthcare coverage! That it's a business decision. Thank your Mr. Obama, Ms Pelosi, Mr. Reid and all the democrats for this gift. Morons.
Well, at the the neo-cons won't have to fund abortion...
YOU were told, you didn't believe. So much for change you can believe in--ask the freeloaders how much they'll get and how much you'll lose because you work.
My boss told me that he was dropping health care coverage for his employees. I asked if health care coverage was part of my compensation package like the republicans say. And if it is will he raise salery by the $5000 to $8000 he is now paying for health coverage for me. I told him I would be able to afford a good group policy with the extra money. He said no that he was going to put the money in the pockets of management. I said it figures. Another GOP lie exposed.
Everyone who defends obama and bashes companies are children pretending to be adults, living in Mommies basement. Obama is INDEFENSIBLE, MORONS! ObamaCare was an ABORTION of a bill and should NEVER have been passed. All the bad results have been predicted, documented, and are well-known EXCEPT by the kool-aid drinking left, and the IDIOT CLASSES ... read that born-again parasites down in the basement. I'm already looking overseas.
Fay T.,
Where do you get your information? I never heard of federal subsidies for group health plans and I worked in executive management, including the position of CEO, of the health insurance industry for 2 decades. Unless this has happened in the last 10 years since I retired I have never heard of such a thing. Please tell us where you get your facts.
To Ed, It is obvious you know nothing about business or management. The GOP and the Democrats don't determine what a company offers in its compensation package. SOME companies make healthcare and other benefits part of it and some don't. But it is their choice what they offer and whether they will continue to offer it. It is not a lie just because you don't understand it. In fact, it is not a lie if the GOP didn't understand it. They're politicians, not insurance people. But then again, given your lack of ability to even spell a word as simple as "salary" I can't expect you to understand something this simple.
Hey Dr Jerry, the artice itself was not from fox you dope. Did you read: But a report issued today in Fortune Magazine and reported by CNN indicates that the dire warnings of ObamaCare critics concerning the consequences of approving the costly legislation are in fact well-founded
Are you really a doctor? Where at, I want to make sure I stay very far away from you!
How's that change working our for you oboneheads?
You don't like America in 2010? Get the hell out, you traitorous dickbags. You won't be missed, retards.
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