Companies with fewer than 50 workers are not required to offer health insurance to their employees. As a result, many small business are dropping coverage for their employees, reports Kaiser Health News. Instead, they are encouraging workers to purchase individual plans on Healthcare.gov.
By not having to cover their workers, businesses avoid paying premiums. That money could go toward raises or other employee benefits instead, notes KHN.
That said, the decision to cancel a plan and let workers purchase coverage on an exchange is difficult.
Many employers believe offering health coverage is essential. "I feel like we have to have a medical plan in order to hire people and keep them employed," Dan Allen, head of a 15-worker engineering firm in Decatur, Illinois, told KHN.
But many employers see the logic in ending coverage altogether.
For instance, managers at Italian Oven restaurants in suburban Atlanta now are eligible for tax credits to purchase coverage on the federal exchange. Owner Jim Dunn made the decision to stop covering his employees, but it seemed like the right decision to make.
"The managers are going to be saving money out of the deal," Dunn told KHN. "My managers actually got excited about it because they're saving money on their health insurance."
This trend of employers moving their employees to a private exchange affects not only the employers and employees but insurers as well, notes KHN.
Anthem, the largest seller of small-business insurance, lost nearly 300,000 members during the first nine months of the year. Many of these consumers decided to make the switch to individual plans sold on the exchanges.
In addition, encouraging employees to purchase individual plans on Healthcare.gov saves small business the trouble of using the Small Business Health Options program (SHOP), which has not worked as planned and has failed to gain traction.
- here's the KHN article