CalNonprofits Articles

As the dust settles and the impact of the Affordable Care Act (ACA) becomes at least a little clearer, most employers are finding that it still makes sense to provide an employer sponsored health plan.

Employers have not always offered insurance plans for their workers. Private companies started offering insurance during World War II, when government wage controls limited employers from giving raises. But since then, job benefits have become an important part of attracting and retaining employees as well as rewarding employees with untaxed benefits. And when presenting his plan, President Obama said that he did not want to disrupt the employer-provided insurance plans that serve 149 million Americans.

Opinions regarding the future of employer sponsored plans range from no change to the prediction that employer health plans will entirely disappear over the next 10 years. A team of experts from the University of Michigan have closely followed ACA and predict that things probably won't change much for the vast majority of Americans, who currently receive health insurance coverage from the government or from employers. Health insurance benefits, they contend, will still make sense for most employers with more than 50 employees. Meanwhile, a new report from PricewaterhouseCoopers found that in Massachusetts, where the model for the federal plan was enacted eight years ago, employer-sponsored coverage rose rather than fell.

These predictions are playing out at CalNonprofit Insurance Services as well, where more than 800 nonprofits access their employee benefit and insurance coverages. Gabriel Padia, Customer Service Manager, reports that only 15 small nonprofits who could no longer afford the cost of health insurance, have actually cancelled their group coverage since the Exchange opened. He also said, "Many nonprofits have called us to talk about the option of ending their employer sponsored plan. But when we go over the pros and cons for their employees, in most instances it's clear that their employees are much better off with their current employer plan."

So should you leave your employer sponsored health plan? There is a lot to consider. Besides attracting qualified job candidates and the tax consequences for your employees, employers should consider what can legally be offered in lieu of a health plan and whether employees will be able to get an affordable plan on the Exchange. Do you need help considering your options? Check out CalNonprofits Insurance Services' resource: What to Think About When Considering Dropping Your Employer-Sponsored Health Insurance.

-- Meredeth Clark, Founder/CEO, CalNonprofits Insurance Services

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