HRA & Mass Cancellation of Group Health Plans

Will mass cancellation of employer-sponsored group policies be an "unintended consequence" of Health Care Reform, or will it be an "intended consequence".

Now that Health Care Reform is the law employers small and large are preparing for and actually terminating their employer-sponsored health insurance plan. Why?

The answer lies in cost and protection. The Health Care Reform bill took away some of the negatives for employers. For example, they were rightfully concerned that an employee with a health issue would not be able to get affordable insurance or insurance at all! The bill takes that fear away:

1. Starting June 23rd 2010, there will be a new federal "risk pool" to guarantee affordable personal coverage to adults with preexisting medical conditions.
2. Beginning September 23, 2010, all carriers offering personal health policies may not reject or charge more for children with preexisting conditions.
3. Beginning January 1, 2014, insurance carriers must accept all applicants for personal policies at the same price regardless of their health status.

The result is that most individuals will be able to purchase their own personal health insurance even if they have a preexisting medical condition. Then they will have their own personal insurance regardless of what happens at their work.

"Under the new rules, virtually every employer with less than 50 employees can switch from group coverage to simply giving employees a reimbursement account so that they can purchase their own personal policy. Most large employers will follow suit once they realize how large of a subsidy their employees receive if the employer does not offer group coverage." Paul Zane Pilser

WHY? With the government set penalty of a maximum of $2000 per employee per year, that calculates to less than $170 per month per employee. That rate would normally be charged for a child in perfect health!

With group rates in PA at or near $1200 per month for a family, that is a major disincentive to maintain the employer-sponsored health benefit. Further, since the employees can get an equal or better plan that becomes a win-win for employers and employees.

Now back to the consequence of group plans being cancelled, I think it is intended so that when more and more people will be in the exchanges. Then a health insurance company crisis will be manufactured so that the government option will "come to the rescue" thus completing the move to single payer government controlled socialistic medicine.

I’m certain that many will disagree with me thinking that I am a conspiratorial whacko. OK. However, simply recall the words of the dems who kept saying "This is like a starter home." That tells me all I need to know.