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Analyst: Large Firms Watch For Signal To Drop Coverage

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Big employers might race to shut down health insurance benefits if other large employers begin to do so.

Paul Fronstin, a director at the Employee Benefit Research Institute, Washington, made that observation in comments about a new benefits study released by EBRI.

Employers are about as likely to offer health coverage as they were in past, and all but 5% of workers with access to employer-sponsored health coverage have coverage, but interviews with 10 large employers suggest that they might be getting close to a “tipping point,” Fronstin said, according to a summary of his remarks released by EBRI.

The employers now say they want to maintain coverage, but they also agreed that they could change their mind if one major employer switched its position, according to the authors of the study.

The authors note that one sign of the seriousness of the situation is that members of the Business Roundtable, Washington, and the National Federation of Independent Business, Nashville, Tenn., have joined with AARP, Washington, and the Service Employees International Union, Washington, in efforts to call for changes.

The significance of these organizations’ proposals is that all “have a common message that employers have reached a tipping point with health benefits and are either proposing alternatives to the status quo or are on the verge of releasing such a proposal,” Fronstin writes.

By contrast, 10 large employers interviewed for the EBRI study (with 18,000 to more than 200,000 employees) “think that health benefits have a positive impact on the bottom line through wellness, disease management, and worker productivity” and believe that “making health care more affordable for both employees and employers is a top business priority,” Fronstin says.