Group Health Plans May Be More Cost Effective for Employers Than Exchanges

Employers will likely pay more if they shift group health plan benefits to federally-subsidized exchanges created under the Patient Protection and Affordable Care Act, according to a new white paper.

The white paper, released by Truven Health Analytics — formerly the healthcare business of Thomson Reuters — concludes that employers could pays as much as $17,269 per employee to shift benefits to federally subsidized coverage starting in 2014. That per-employee expense is roughly $9,000 more than employers currently pay to cover each employee on a group health plan.

If employers decide to eliminate group health plans altogether without providing a subsidy to employees, each employee would pay an average of $16,551 per year for health coverage in 2014, according to the white paper's findings. Under this scenario, employers would pay a penalty for not covering employees, but reduce annual healthcare costs.

However, the white paper concludes that eliminating health coverage may not be in a company's business interest and "may potentially have a large impact on an employer's competitive market position for retaining and recruiting talent."  

More Articles Related to Health Insurance Exchanges:

HHS Expands Funding, Guidance of Health Insurance Exchanges
78% of Americans Who Qualify for Health Insurance Subsidies Never Heard of Exchanges
New Bill Would Block IRS Tax Credits for Health Exchanges

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