New Report Finds Health Plans Will Be Cut in 2014

When most of the health-care overhaul bill becomes law in 2014, 30 percent of companies will probably slash health insurance for employees.

June 09, 2011

WASHINGTON - In 2014, most of the provisions of Obama??s health-care reform bill will take effect, which will probably translate into 30 percent of businesses withdrawing health insurance for employees, according to new report by McKinsey & Co., the Wall Street Journal reports.

An increasing number of companies have requested waivers from a provision to offer better benefits in 2011. However, no waivers would be granted once 2014 rolls around, which gives businesses only two options: adhere to the new mandates or eliminate health insurance.

While research has seemed to show that not many employers would cease coverage in 2014, this study forecasts a greater shift from company-sponsored health insurance once the health care market changes.

"History has shown that reform motivates more businesses to offer insurance," said Nick Papas, an Obama administration official. "When Massachusetts enacted health reform, the number of individuals with employer-sponsored insurance increased."

The study found that at least 30 percent of businesses would come out ahead economically if they dropped health insurance coverage and provide more compensation to employees via more salary or other benefits.

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