Prediction: Large Companies Will Keep Offering Employer-Sponsored Health Insurance

Prediction: Large Companies Will Keep Offering Employer-Sponsored Health Insurance

Health insurance reform certainly changes the face of coverage in this country. Health care will become less dependent on working for an employer that offers coverage, due to policies that make the open market more friendly to potential buyers with pre-existing conditions.

Some believe that major employers will end up phasing out their health insurance plans. Instead, they will leave more of those people to the exchange markets, once they are online. In that case, the federal government will have to provide subsidies for a large portion of those previously insured. Budget estimates for the legislation did not account for such an exodus, making the funding situation dire if that occurs.

The CEO of one of the nation's biggest health insurers, though, does not feel like that will come to pass. Stephen J. Hemsley, the president and chief executive officer of United HealthCare, does not foresee significant changes in employer-sponsored health insurance plans.

In Hemsley's view, there will not be an exodus of large employers from the commercial market. That is because the convenience of managing one commercial health insurance plan outweighs the slight cost savings they may experience for dropping coverage, especially since they will be subject to tax penalties for doing the latter.

Granted, health insurance companies have worried more about the negative impact healthcare reform will have on the number of small businesses that buy policies from them. The federally funded subsidies that will be available to them in the exchanges are more important and necessary for them. However, even a handful of large corporations with tens of thousands of employees each would have a detrimental effect if they left UnitedHealth Group or any other insurer.

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