Healthcare Business News

9% of employers to drop coverage in 2014: survey

By Rich Daly
Posted: August 24, 2011 - 3:45 pm ET

Nine percent of employers surveyed recently reported plans to drop their insurance coverage when health insurance exchanges launch in 2014.

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The Towers Watson survey of 368 midsize to large companies found some of those companies will offer increased pay or other benefits to compensate for the loss of coverage. Preview data from the survey were released Wednesday but the international business consultancy will not release detailed results for several months, according to a spokesman.

The findings are the latest to indicate that substantial numbers of employers will drop their worker insurance coverage because of provisions of the 2010 federal healthcare law, such as the various insurance coverage mandates that will continue to fuel rising premiums.

The results follow several employer surveys that have found varying percentages planning to drop their coverage because of the law. The highest profile of these was a June employer survey by consultant McKinsey & Co., which suggested that up to 30% of employers would drop insurance for their workers because of the federal healthcare overhaul. That survey drew a torrent of protests from the White House and congressional Democrats, but the Obama administration has yet to issue a response to the Towers Watson numbers. The quiet reception may be due to the rate employers of dropping insurance coverage is only slightly higher than projections produced by the Congressional Budget Office when the bill was introduced.

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