Major Companies Thinking About Dropping Employer-Sponsored Benefits

Should we call this another 'surprise' consequence of the Health Care Law. The problem with calling it a surprise is that it really is not. One of the major criticisms of the bill while it was being rammed through debated was the companies would drop the employer-sponsored benefits opting for the penalties which could be cheaper. As such, people would not be able to keep their current plans if they liked them; a promise made repeatedly by Obama and the supporters of the bill.

http://money.cnn.com/2010/05/05/news/companies/dropping_benefits.fortune (via)

"The great mystery surrounding the historic health care bill is how the corporations that provide coverage for most Americans -- coverage they know and prize -- will react to the new law's radically different regime of subsidies, penalties, and taxes. Now, we're getting a remarkable inside look at the options AT&T, Deere, and other big companies are weighing to deal with the new legislation.

Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill's critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.

That would dismantle the employer-based system that has reigned since World War II. It would also seem to contradict President Obama's statements that Americans who like their current plans could keep them. And as we'll see, it would hugely magnify the projected costs for the bill, which controls deficits only by assuming that America's employers would remain the backbone of the nation's health care system."