However, other experts contend there remain numerous barriers to a wholesale employer flight from providing coverage in the wake of the Hobby Lobby decision. “The tendency of the press is to overreact to everything,” said Massachusetts Institute of Technology health-economics professor Jonathan Gruber, one of the chief architects of the Patient Protection and Affordable Care Act.
Those barriers include the pervasive economic reality of employer-based health insurance and the language of the opinion itself. About 57% of all companies offered health benefits to their employees in 2013, according to the most recent data from the Kaiser Family Foundation.
For family coverage, employers paid about $11,800 of the average $16,400 annual cost for a plan. Those corporate expenses, and often a portion of employees' expenses, are tax-free. For individuals, employers covered $4,900 of the average $5,900 plan. If a company gave workers a raise to pay for coverage and then axed its insurance program, the income would be taxed. Such arrangements would forfeit the federal tax-write off for workers and trigger corporate penalties under the Affordable Care Act.
One alternative is for more employers to move toward private exchanges, where their workers could use tax-advantaged company funds to select among a dozen or more insurance plans. The private exchanges, most operated by major benefits-consulting firms, are similar in structure to the public exchanges that operate for the non-group market.
“Many people predict that the private exchanges will eventually become larger than the public exchanges,” said Joel Ario, a managing director with Manatt Health Solutions. “If that decision is given to most people, and the exchanges actually work for most people … I don't know too many people who would prefer their employer to buy their coverage.”
However, there's also the matter of the Hobby Lobby decision itself. Justice Samuel Alito, writing for the majority, wrote explicitly that the decision was limited to the facts in this particular case, which involved objections to four of the 20 forms of birth control mandated for coverage under the reform law. “Our decision should not be understood to hold that an insurance coverage mandate must necessarily fall if it conflicts with an employer's religious beliefs,” he wrote on behalf of the five-member majority.
That statement didn't convince all observers. The court is well aware that more than 80 other private and not-for-profit organizations are still suing to block aspects of the contraception mandate, and virtually no one speculated that last week's decision would close the door on the high court considering other challenges to the law.
“I think it opens the door,” Blackwelder said. “This creates a precedent to other challenges and lawsuits. Once you start down a path, there are intended and unintended consequences.”
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