Many Employers May Drop Healthcare Coverage After 2014

When 2014 rolls around, and the primary provisions of President Obama's healthcare reform plan takes effect, a huge percentage of employers may let go of their group healthcare programs.

According to a study released by McKinsey & Co., a staggering 30 percent of U.S. employers who were polled indicated they may pull the plug on their company's health care plans after 2014. That's when the Obama-care provision mandating individuals to purchase their own healthcare coverage takes effect. In addition, the federal health insurance premium subsidies for lower-income employees takes effect in 2014.

Over 1,300 employers of various sizes were surveyed. Of those who resonded, 30 percent said they will either “definitely” or “probably” stop offering coverage after 2014.

The study noted: “The shift away from employer-provided health insurance will be vastly greater than expected and will make sense for many companies and lower-income workers alike.”

Employers that elect to drop their group health coverage would pay a $2,000 annual penalty for each full-time employee; but that fine is small potatoes compared with the overall annual savings.  Group insurance plans employers an average of about $9,500 per employee in 2010.