Study Finds Some Healthcare Plans Are Unaffordable

Pro-business consultant Mercer L.L.C. predicts some employers will find healthcare reform too costly.  Approximately 38 percent of companies have employees for whom healthcare insurance coverage would be deemed “unaffordable”, according to a study by the New York-based pro-business benefit consultant Mercer L.L.C.  According to the healthcare reform bill that phases in between now and 2014, employers are subject to penalties if premiums paid by their full-time employees are more than 9.5 percent of household income.  The yearly penalty for too-expensive coverage is $3,000 for each full-time employee who takes government assistance to buy coverage in a state insurance exchange.

“Lawmakers did not take into account that employers don’t have access to information on employee household income,” said Tracy Watts, a Mercer partner.  “Employers question how they are going to get that information and what other administrative challenges might come along with this new requirement.  For example, what happens if an employee’s total family income changes during the course of a plan year?”

Another Mercer finding is that 51 percent of employers with more than 500 workers offer coverage to part-time employees who work 30 hours a week or more.  The rest either do not offer coverage to part-timers, or require that they work 30 hours to be eligible.  “This rule will require employers with a lot of part-time employees to make some hard choices,” according to Watts.  “If they don’t offer coverage to part-timers, can they afford to start, or to raise the minimum hours required for coverage?”

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