Some Employers Plan On Dropping Health Benefits To Deal With Rising Medical Costs

In somewhat troubling news for the more than 160 million Americans who get their healthcare through employer-sponsored programs, almost 10% of those employers say they’ll likely drop health coverage for their workers in the next three years, blaming rising medical costs.

The good news is that 81% of companies say they’ll continue to provide health benefits, with another 10% saying they’re unsure what will happen as new rules begin under the Affordable Care Act in 2014, according to a survey cited by the Los Angeles Times.

The average cost for healthcare benefits rose by 9% last year, while wages only grew 2.1%. Employers are now trying to find new ways to provide health benefits.

Some might institute defined-contribution plans where workers get a fixed amount of money and allow them to buy to buy their own insurance on the open market or in a private exchange.

Others are checking out contracting with hospitals and large physician groups to get the best deals out there and cut down on the costs they have to pay out to insure their workers. Employers in the survey cited hospitals as the top reason those medical costs are on the uptick. Additional reasons include unhealthy lifestyles leading to more health issues, as well as inefficiencies in the system.

Nearly 10% of employers to drop health benefits, survey finds [Los Angeles Times]


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  1. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    **keeping fingers crossed that my employer will still offer coverage**

    I just have this sinking feeling that at the end of 2013, like Dec 27, we’ll get an email from HR that says “oh, by the way, we’re discontinuing health insurance coverage effective Jan 1”. Cue the race to find insurance, only to find that the plans are so expensive, that while available, buying a plan that takes up 3/4 of your take home pay isn’t practical. I hope I’m wrong!

    • spamtasticus says:

      Tell your employer that you dont need them to pay for your insurance. Tell them to just pay you what they were paying for you before and get your own plan.