February 21, 2013

Obamacares: More companies to self insure healthcare, adding to others' costs

NY Times - Federal and state officials and consumer advocates have grown worried that companies with relatively young, healthy employees may opt out of the regular health insurance market to avoid the minimum coverage standards in President Obama’s sweeping law, a move that could drive up costs for workers at other companies.

Companies can avoid many standards in the new law by insuring their own employees, rather than signing up with commercial insurers, because Congress did not want to disrupt self-insurance arrangements that were seen as working well for many large employers.

“The new health care law created powerful incentives for smaller employers to self-insure,” said Deborah J. Chollet, a senior fellow at Mathematica Policy Research who has been studying the insurance industry for more than 25 years. “This trend could destabilize small-group insurance markets and erode protections provided by the Affordable Care Act.”

Self-insurance was already growing before Mr. Obama signed the law in 2010, making it difficult to know whether the law is responsible for any recent changes. A study by the nonpartisan Employee Benefit Research Institute found that about 59 percent of private sector workers with health coverage were in self-insured plans in 2011, up from 41 percent in 1998.

Orlando Sentinel - Universal Orlando plans to stop offering medical insurance to part-time employees beginning next year, a move the resort says has been forced by the federal government's health-care overhaul. The giant theme-park resort, which generates more than $1 billion in annual revenue, began informing employees this month that it will offer health-insurance to part-timers "only until December 31, 2013."


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