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The choice facing employers

February 22nd, 2011

By jeremy.engdahl-johnson

The Milwaukee Journal Sentinel looks at the choice facing employers: Do we continue providing coverage to employees? Or do we drop coverage, pay the penalty, and let employees buy insurance through one of the exchanges due to come online in 2014?

While the back-of-the-napkin cost/benefit analysis may point to a clear financial incentive for dropping coverage, the Sentinel article finds something else brewing. Here is an excerpt:

Nothing requires employers to provide health benefits now – there’s not even a penalty. Companies provide benefits to compete for the workers they need to make money.

“That hasn’t changed,” said Scott Weltz, an actuary with Milliman, an actuarial and consulting firm…Some employers, particularly those with low-wage workers, will want to look at the alternatives…But once they do, they often conclude that they want to continue offering benefits for now.

The full article (which is a thorough analysis of the question) is available here.

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