Ways and Means GOP: PPACA Will So Cause Worker Dumping

The companies that participated in the Ways and Means survey believe they would pay an average of $139 million each in penalties per year if they eliminated group health benefits but that the net savings would be about 3 times that amount.

PPACA supporters have pointed out that employers already could save the full cost of providing health benefits — an average of $541 million for each of the companies that participated in the Ways and Means survey — by eliminating health benefits today.

Many employers continue to provide health benefits even in states such as New York that already require insurers in the individual market to sell individual coverage on a guaranteed-issue, community-rated basis, PPACA supporters say.

Earlier in the spring, Rep. Pete Stark, D-Calif., said at a hearing on PPACA that analysts at the Congressional Budget Office and a number of private organizations, such as RAND, Santa Monica, Calif., and the Lewin Group, an arm of UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH), have predicted that the effects of PPACA on the employer plan market will likely be modest.

“Let’s remember that the employer mandate only applies to companies with 50 or more full-time employees,” Stark said at the hearing, according to a written version of his remarks posted on the Ways and Means website. “The data show that in our purely voluntary health insurance system today, virtually all – 94%  – of employers at this size already offer coverage to their workers. Thus, the mandate doesn’t negatively affect them. Instead, it levels the playing field among employers by making sure that each pay their share of health care costs for their workers.”