For the majority of employers, the question of whether to move employees to the Obamacare exchanges is similar to so many business decisions they make throughout the year.
“It really is all about the bottom line and the results of cost-benefit analyses,” said Iris Tilley, an employee benefits attorney in Portland, Ore. “That’s what I’m hearing mostly from clients, and when they seek our advice about health care, we are encouraging them to undergo the means test and figure out what makes the most sense for their business.”
In general, Tilley said those employers who are contemplating migration most seriously include companies with fewer than 50 full-time employees, those with high health insurance premiums or those who employ high-wage workers.
She said for them, an exchange migration might pencil out because they won’t face pay-or-play penalties, or if they do, the penalties for some of those organizations likely will be less expensive than the cost of providing health care coverage.
Examples in that latter instance would include employers with a generally younger workforce, or employers with easy-to-replace employees.
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One of the biggest advantages to moving to a public exchange may be the handing over of the financial and administrative burdens in running a company’s health benefits.
That could sway some employers, but not all.
Take Harold Wood, for example. He employs seven people in an auto-body shop in Salem, Ore. Wood told the Statesman Journal last week that he stopped offering health insurance about a decade ago because it was too expensive. He intends to explore the Oregon state exchange, but at this point, he said he remains fairly pessimistic about health care costs.
“That’s a wait and see, but again it better be good,” he said. “I frankly don’t think it’s going to be in the affordable range for most business people.”
But sometimes the bottom line is affected by the quality of the workforce, and not just the amount of cash coming in and going out.
Jeffrey Lewis, an employment law attorney in San Francisco, said employers who generally hire workers with unique and highly specialized skills might be more cautious when it comes to foregoing health care coverage and directing employees to an exchange.
“Then, yes, in an extremely competitive marketplace, it could become an issue, if you terminate coverage yet rival organizations continue to offer it (health care) as a way to attract and retain the best, brightest and most sought after employees with key skills to their companies,” Lewis said.