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An interesting read.
How Will Corporations React?
Inquiring minds are reading interesting anecdotes about Healthcare on Silicon Investor. A well respected poster Hawkmoon writes ...
Mish,
Had a VERY INTERESTING conversation this evening with a CFO for a local business who employs about 100 people total..
I asked him how this health care bill was going to affect the company he works for.
Hetold me that he had run the numbers based upon providing health carefor all of their employees and realized that he could save the company1/2 million dollars by just paying the $2000 per employee penalty andnot offering any coverage at all.
Is this how the government plans on taking over all health care?
Ifit's more cost effective for business to just pay the penalty ratherthan provide coverage, I wonder how many are going to opt for thatstrategy?
Any other business owners out there have a different view?
Would be interested to know.
Hawk
Another poster, "John M" responds ...
I ran the same simulation for the company I retired from. As a retiree, I continue to be in their group plan, at my own expense.
Theycan save $607,000 by terminating the health insurance plan, offset by afine of $200,000. The company may get an extra push to eliminate healthinsurance courtesy of penalties on "Cadillac" plans. A rate increase of4.7% would push it into Cadillac territory, which is defined by costs,not by benefits.
If cost savings were distributed to employeesas raises, employees would presumably be able to purchase non-Cadillacplans with better benefits, and some potential savings. If there areminimum benefit schedules, then price would be the major considerationin buying health insurance.
"The Reaper" responds ...
Idon't know about companies but individually. I'm just going to pay thefine each year (which is minimal) until I need health insurance (withsome kind of illness/accident) then buy the insurance since I can't beexcluded. With any luck I'll make it to Medicare and I'll have saved abundle of cash.
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