Will Employers Bear Increase Health Benefits Costs Or Pass To Workers?

Employers all over the country have been planning for the New Year

, long before anyone will actually pop the champagne and start the holiday festivities. This is because the new health care reform has left employers scrambling to figure out the plan as well as deal with the added costs.

Health benefit costs are now taking the main stage in employer budget calculations. This has everything to do with the health care bill that was passed in March of this year. Because the plan for nationalized health care has to deal with company's insurance programs, employers are now forced to find ways to cover the expenses or make the decision to pass them on to workers.

A study completed earlier this year by the National Business Group on Health found that large employers are planning to find ways to absorb some of their costs in creative ways. One such way may result in somewhat lower gross salaries. Other companies plan to simply have their employees pay a higher percentage of the total premium, pay higher deductibles, or pay higher out of pocket expenses.

One of the main reasons that the new health care bill increases costs so much for employers is because it now requires employee's children, up to the age of twenty six years old, to be allowed to stay on their parent's plan as a full dependent. Prior to this law, companies did not have to allow children to stay on the plan if they were no longer in school. Now, there are no conditions on children, up until the age of twenty-six.

Another reason for increased costs has to do with the now mandated removal of annual limits or lifetime maximums on the cost of health care. While some employers lift lifetime maximums, others find it saves a bit of money to simply life annual limits.

These extra expenses for employers could not come at a worse time. With the economy already in such turmoil, this so called beneficial plan may actually end up contributing to more unemployment, and more businesses closing their doors because they simply cannot keep up with the added expense of health care reform.

by: Dominic Lin

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