The Patient Protection and Affordable Care Act of 2010 (PPACA) could create strong financial incentives for even the most benevolent employers to dump group health plans members into the individual health insurance market, according to Republicans at the House Ways and Means Committee.
Republican analysts conclude in a look at the possible effects of PPACA on the group health market that the large employers that participated in a committee survey could save an average of $402 million each in 2014, or about $4,821 per full-time and part-time U.S. employee, by eliminating group health benefits.
The analysts say they polled all of the companies on the Fortune 100 list and based their report on data from the 71 companies that responded.
The participating companies now spend an average of $541 million each per year on health benefits for active employees, the analysts say.
PPACA opponents are fighting the act in Congress and in the courts. If PPACA takes effect as written and works as drafters expect, it will require employers with the equivalent of 50 or more full-time employees to provide a minimum level of health benefits or else pay a penalty.
But the penalty will only be $2,000 per non-covered employee per year, and PPACA is supposed to give individuals the ability to buy coverage on a guaranteed-issue, mostly community-rated basis, the analysts say.