Once upon a time in America, a worker expected to:
- Stay at the same company until he (usually it was not a woman) received a gold watch after 25 years of service
- Receive a pension upon retirement
- Be guaranteed employer-sponsored health insurance, which reimbursed physicians for services rendered and today is referred to as indemnity insurance.
Over time, many things about the above-scenario have changed. Women are no longer looked at askance for working; very few people stay with the same company for 25 years; pensions have morphed into defined contribution 401K plans; and indemnity insurance has mostly given way to managed care.
The constant: Employer-sponsored health insurance. But for how long?
A report commissioned by Congressional Republicans and released last week noted that consultants have been telling some large employers they could save money in 2014 by dropping health insurance for their employees and, instead, directing them into insurance exchanges. Further, The Wall Street Journal reported that consultant Mercer told Southwest Airlines last year that its healthcare costs under reform would total $414 million, while dropping coverage instead would cost it $111 million in penalties.
Putting aside for a moment the politics surrounding the healthcare reform package, one does have to wonder whether all employers will continue to pay for health insurance. Sure, insurance is a benefit that does attract and retain desired workers. But so were guaranteed pensions.
Most large employers insist they will continue to provide insurance once exchanges are an option in 2014, the Journal article notes. But what about those companies with lower-paid workers, where retention or skills are not as much of an issue. Are they more likely to shift workers to exchanges. Some consultants say they will because, while many smaller companies have received insurance tax credits that have decreased their health insurance costs, others that offer bare-bones or no health insurance could pay more if they increase coverage in 2014.
Reaction to last week's report, of course, featured partisan responses, with Republicans reiterating their position that the reform law will increase costs and lead employers to drop insurance while Democrats called the report misleading and conveniently bereft of responses from businesses that said the law would not increase costs.
And so as we watch and wait and process the warnings from both sides, we can be sure of this: The only constant, really, is change. And it is not beyond the realm of possibility that employer-sponsored health insurance will go the way of pensions and gold watches.