AP: Small businesses look at axing family coverage when ObamaCare hits

As the ObamaCare mandates approach — even those purportedly postponed — employers are looking for ways to get around the ballooning costs of insurance for their employees.  Larger employers can spread the costs out better and negotiate lower rates, but smaller businesses have fewer options for retaining their benefits.  The Associated Press reports thatmany smaller businesses may abandon paid dependent coverage, forcing employees to bear the whole cost, especially for spouses:

One casualty of the new health care law may be paid coverage for families of people who work for small businesses.

Insurance companies have already warned small business customers that premiums could rise 20 percent or more in 2014 under the Affordable Care Act. That’s making some owners consider not paying for coverage for workers’ families, even though insurance is a benefit that helps companies attract and retain top talent. If more small business owners decide to stop paying for family coverage, it will accelerate a trend that started as the cost of health insurance soared in recent years. …

Premiums have been soaring for years because of the rising cost of medical care. But the ACA also has requirements that may drive premiums higher, including a tax on insurance companies that is expected to be passed along to employers. Shoop’s insurer has warned that the tax could send his premiums up more than 20 percent a year from now.

“It’s going to be very significant,” Shoop says. “We’re really going to have to do a juggling act, and so are our employees.”

The ACA requires businesses with 50 or more employees provide coverage to their workers — but family coverage is a different matter.  The mandate requires that employers offerinsurance coverage for dependent children (now through age 26, which may be a driver of the increase as well), but does not require employers to cover the cost of that insurance.  Spouses don’t even get that much; the law does not require employers to include them at all, even at the full cost to the employee.  That will send them into the individual exchanges, if employers have to restrict their expenditures enough — and that means more federal outlays for subsidies, and a quicker pace to the barrels of red ink that ObamaCare will produce.

Via:Hot Air

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