Documents reveal AT&T, Verizon, Caterpillar and Deere are considering droping health care coverage

[mlmpetert]

So this is about a month old, but i no longer have cable and have been pretty out of touch with current events lately.

I was listening to a health care sector analyst and a employee benefits consultant a week or so ago. This was one of the topics. Currently health care reform takes into consideration that most or at least a lot of small business are going to drop employee healthcare insurance from their employee benefit offerings. It does NOT take into consideration big companies dropping health care insurance as a benefit.

If you have a business with less than 50 employees and do not offer healthcare insurance you are NOT subject to a fine. If you hire that 51st employee you have to pay a 2k penalty for each employee you have, so that 51st employee cost you 100k or the cost to cover everyone, which is likely more than 100k. (Disclaimer: I’m simplifying a little bit. I think the penalty is equal to about 2/3rd of 100k due to credits (cant remember exactly), but the more employees you have over that 51st hiring the less impact the “credits” have). So a big knock on the original reform bill was that no one is going to hire that 51st employee, and that’s why it’s “only” the 2k penalty, it used to be a 8% payroll penalty tax so any employee making over 25k a year would cost more than the 2k penalty. So it used to be a worse penalty now its “better”. Also this applies only to full time employees which I think they currently define as people working 30+ hours.

So the congress came up with 2k because they thought it wouldn’t discourage smaller business enough to stop hiring at 50 employees, maybe slow them down or possible even entice them to offer healthcare insurance, but it shouldn’t stop them completely. But what about the big guys? They didn’t think about them and it’s MUCH better for them.

Henry Waxman was upset about write downs big (publicly traded) companies were announcing related to the retiree drug benefit subsidy so he asked for their internal documents relating to their analysis to these write downs. But he also asked for ALL documents relating to any health care analysis these big companies did. He got a lot more than he wanted, and cancelled the hearings to avoid embarrassment and more public backlash about healthcare overhaul. So here is the rest of the story:

http://rawstory.com/rs/2010/0506/att-verizon-considered-dropping-health-insurance-employees/

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

The two speakers both think there’s very little chance healthcare reform gets repealed. However this is the biggest threat to it. This is a very big deal. There is no way the reform plan can work if big companies do not provide coverage to their employees. Even if some big companies drop coverage it will be a very big deal. They said at some point reform will have to take place to change the current 2k penalty so that different sized companies are affected differently. But said if Republicans take control reform will likely not take place and basically it comes down to what big company wants to pull the trigger first.

Also what was kind of sad to hear is they thoroughly expect most small companies to drop health care coverage to their employees…. I work for a small company.

[firstdown]

They don't want the plan to work so then they can make the argument for a national plan. This was pretty basic stuff and these larger companies can now push this expense over on to the government. Sure they will get hit with higher taxes but they are betting the tax will be less then what providing health care cost them now.

[Monkeydad]

Thank the President.

[Schneed10]

The private sector is so far ahead of the government in terms of understanding the tax laws, it's not even funny. The $2K fine was a ridiculous number, it pretty much gives all the incentive a company would ever need to revoke coverage.

Lawmakers = simpletons. That's what happens when you spend half your life campaigning, as opposed to studying the issues and actually thinking about them.

[GMScud]

Originally Posted by Schneed10

The private sector is so far ahead of the government in terms of understanding the tax laws, it's not even funny. The $2K fine was a ridiculous number, it pretty much gives all the incentive a company would ever need to revoke coverage.

Lawmakers = simpletons. That's what happens when you spend half your life campaigning, as opposed to studying the issues and actually thinking about them.

This.

[mlmpetert]

What’s also really sad is that this HUGE mistake was caught, though inadvertently, and instead of fixing the problem they went ahead with reform as it was.

[saden1]

Originally Posted by Schneed10

The private sector is so far ahead of the government in terms of understanding the tax laws, it's not even funny. The $2K fine was a ridiculous number, it pretty much gives all the incentive a company would ever need to revoke coverage.

Lawmakers = simpletons. That's what happens when you spend half your life campaigning, as opposed to studying the issues and actually thinking about them.

They're not simpletons for the most part nor are their staff or committee aids, they simply have others writing them bigger checks to include/exclude things from bills. These loopholes are going exist no matter what gets passed...the key is closing these loopholes as soon as possible.

[Schneed10]

Originally Posted by saden1

They're not simpletons for the most part nor are their staff or committee aids, they simply have others writing them bigger checks to include/exclude things from bills. These loopholes are going exist no matter what gets passed...the key is closing these loopholes as soon as possible.

Well OK, they're capable of understanding the issues, but they just don't bother to. Whether because they're having to spend time campaigning, or because they have competing interests, either way they don't get deep enough on things.

As a result they develop legislation that's too simple (hey, let's just pick a number, $2K per employee sounds good!). Then they're surprised when the AT&Ts of the world, with the intellectual capital capable of catching onto such dubious mistakes, do just that and rape the system.

This is one reason why less government is better. These guys just aren't very good at what they do.

[firstdown]

Originally Posted by Schneed10

The private sector is so far ahead of the government in terms of understanding the tax laws, it's not even funny. The $2K fine was a ridiculous number, it pretty much gives all the incentive a company would ever need to revoke coverage.

Lawmakers = simpletons. That's what happens when you spend half your life campaigning, as opposed to studying the issues and actually thinking about them.

Sorry but I think your wrong. They knew well in advance that a $2,000 fine was not enough and would have no affect and companies would do this. Its the game of failing to get what you really want national health care. Think about this fine. Congress them self knew health care was costing companies over $5,000 per year (thats a low figure I made up) and they had to know the math that a $2000 fine would not stop companies from not offering health coverage. They know it will not stop the companies and that what they want. Now the fix is national health care.

[Miller101]

Dang...........this sucks! But, I guess this is what happens when every republican out there votes hell no to everything.

[Schneed10]

Originally Posted by firstdown

Sorry but I think your wrong. They knew well in advance that a $2,000 fine was not enough and would have no affect and companies would do this. Its the game of failing to get what you really want national health care. Think about this fine. Congress them self knew health care was costing companies over $5,000 per year (thats a low figure I made up) and they had to know the math that a $2000 fine would not stop companies from not offering health coverage. They know it will not stop the companies and that what they want. Now the fix is national health care.

OK bizarro Michael Moore, nice conspiracy theory.

[MTK]

Originally Posted by Schneed10

OK bizarro Michael Moore, nice conspiracy theory.

[firstdown]

Originally Posted by Schneed10

OK bizarro Michael Moore, nice conspiracy theory.

It is too easy to figure out and is not any type of conspiracy. Or Obama and that bunch are so f^%ing stupid that even I cannot believe they are that dumb.

[steveo395]

Originally Posted by firstdown

Sorry but I think your wrong. They knew well in advance that a $2,000 fine was not enough and would have no affect and companies would do this. Its the game of failing to get what you really want national health care. Think about this fine. Congress them self knew health care was costing companies over $5,000 per year (thats a low figure I made up) and they had to know the math that a $2000 fine would not stop companies from not offering health coverage. They know it will not stop the companies and that what they want. Now the fix is national health care.

[mlmpetert]

Employers looking at health insurance options - Yahoo! News

WASHINGTON – The new health care law wasn't supposed to undercut employer plans that have provided most people in the U.S. with coverage for generations.

But last week a leading manufacturer told workers their costs will jump partly because of the law. Also, a Democratic governor laid out a scheme for employers to get out of health care by shifting workers into taxpayer-subsidized insurance markets that open in 2014.

While it's too early to proclaim the demise of job-based coverage, corporate number crunchers are looking at options that could lead to major changes.

"The economics of dropping existing coverage is about to become very attractive to many employers, both public and private," said Gov. Phil Bredesen, D-Tenn.

That's just not going to happen, White House officials say.

"The absolute certainty about the Affordable Care Act is that for many, many employers who cover millions of people, it increases the incentives for them to offer coverage," said Jason Furman, an economic adviser to President Barack Obama.

Yet at least one major employer has shifted a greater share of plan costs to workers, and others are weighing the pros and cons of eventually forcing employees to strike out on their own.

"I don't think you are going to hear anybody publicly say 'We've made a decision to drop insurance,' " said Paul Keckley, executive director of the Deloitte Center for Health Solutions. "What we are hearing in our meetings is, 'We don't want to be the first one to drop benefits, but we would be the fast second.' We are hearing that a lot." Deloitte is a major accounting and consulting firm.