A recent Human Resource Executive Online article illustrates how employers could find themselves between a rock and a hard place when determining whether or not to drop health insurance for their employees in light of looming healthcare reform.
The article provides evidence for what many employers already suspected and feared: that the healthcare reform will most likely cause a huge spike in healthcare costs. Research from the Corporate Leadership Council (CDC) cited in the article found that healthcare costs would have more than doubled between 2011 and 2018 even without the reform laws. But rough numbers generated by the CDS projected that the costs will actually jump 240 percent when you figure in the healthcare reform. So employers’ cost-per-employee for a PPO Plan could jump from around $8,085 in 2011 to $19,497 in 2018!
These spikes, not to mention the extra administrative burdens that the reform brings, may cause employers to consider dropping healthcare coverage altogether. But doing so will expose them to government fines, government mandated subsidies to help employees buy their own insurance, difficulty finding and keeping quality workers, and resistance from employees who want their wages increased to make up for the loss of benefits.
Another alternative for companies is to consider hiring contractors rather than direct-hires and outsourcing the employment to a contracting back-office. The back-office would be responsible for providing, administering, and, most importantly, contributing to contractors’ healthcare coverage. So if you have clients who are weighing their options in light of the recent healthcare reform, offering contracting may be a way for you to help them and provide yourself with a steady contracting income!
