Survey Finds That a Good Number of Employers Will Not Drop Health Cover Due to Obamacare

Regardless of conjecture around Obamacare, most employers do not plan to drop health cover due to the Affordable Health Care Act. According to a recent survey by the International Foundation of Employee Benefit Plans, 70% of benefit professionals said, that their companies would continue to offer health cover to for full time workers next year, 1% said their companies would not offer health care coverage and 2% deemed it unlikely.

Companies with 50 or more employees were required to provide health care insurance for their employees or pay penalties. Many felt either employers would rather pay fines or keep on part time workers instead.

Dave Dillon, the CEO of the Kroger grocery chain, told the Financial Times in February that while his company plans to continue to insure full-time employees under Obamacare, others may not. “If you look through the economics of the penalty the companies pay versus the cost to provide coverage, the penalty’s too low, or the cost of coverage is too high, or the combination is wrong,” he said.

Some companies have experimented with hiring more part workers, - Darden Restaurants - the parent company of Olive Garden and Red Lobster – backed off the test as the results were negative.

Gary Burdette, franchise owner of Wendy’s in Nebraska, said that the company would reduce the working hours of employees to 28 hours per week to avoid paying for health care coverage.

Almost 90% of employers have no plans to move full time workers to a part time status due to Obamacare.

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References:

Hannah Punitha (IRDA Licence Number: 2710062)

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Huffington Post, April 3013

Source-Medindia