Losing Employer Sponsored Health Insurance?

“...if Americans like their doctor they’ll be keeping their doctor, you like your plan, you’ll be keeping your plan.” - President Obama on Health Care Reform bill.

It seems President Obama's statement is not exactly correct. Major companies are already evaluating the option of dropping employer sponsored health benefits and reported in this Fortune article that examines documents submitted by AT&T, Verizon, Deere and Catepillar to the House Energy and Commerce committee chaired by Rep. Henry Waxman.

The original intent of the committee was to show that these companies had incorrectly claimed write downs based on the health care legislation. Instead, the investigation showed the companies' write downs were proper and revealed that these companies had done cost analyses on providing health insurance to employees versus paying the penalty for not doing so. All four companies concluded it would significantly lower costs to get out of the business of providing health insurance, i.e. eliminate providing health care, pay the penalty, and let the government manage health care insurance in the future.

Based on this article, I believe the following must be true:

My company has also done the analysis. I would be surprised if all the Fortune 100 companies haven't done analysis, which would include the company from which I retired. While my company is self insured, I expect it would still may be cheaper for them to pay the penalty than to continue providing health insurance.

I may not be able to keep my current health insurance plan. If my company decides to eliminate employer sponsored health insurance, the plan will no longer exist. I guess I better start investigating my future health insurance options on the exchanges, just in case.

At this point, none of the mentioned companies have dropped health insurance for their employees. Also, my company has not communicated any changes to my retiree health insurance. However, based on the Fortune article, I will be certainly will be more interested the types and costs of insurance coverage in exchanges, since I may be participating in the future.

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This is not financial or insurance advice. Please consult a professional advisor.

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