Why Employers are Dropping Health Insurnace

Following a growing number of large employers that are dropping group health insurance, Target announced yesterday that it will be no longer offering group health benefits to their part-time employees.

This move by large employers includes Trader Joes, Home Depot and other large and small employers that are growing in numbers and dropping their group health insurance plan for both part-time and full-time employees.   The reason?  In many cases it makes financial sense for both the employer and the employee for the company not to offer group health insurance anymore, to make them eligible to receive government subsidies that can many times be far less expensive than a traditional group health, especially for employees that have families.  Under the Affordable Care Act, when employers offer coverage that meets the requirement to be ‘affordable’, the employee and their family are ineligible to receive generous subsidies paid by the federal government.  This wrinkle in the law is causing employers in the droves to re-examine their benefits strategy and drop group health coverage in favor of providing employees a stipend to purchase health insurance in the health exchange.  Service providers like Affordable California make the transition of moving employees from employer group health plans into individual health plans easy and provide on-going employee services so the employer can focus on their business.

Affordable California is a free service provided by Healthy Halo Insurance Services and includes a free cost-benefit analysis to determine what makes sense for all size employers and their employees.

AUTHOR - Ali Nagy