Will the link between employment and health insurance survive?
Thats one of the serious questions that a new report from the Employee Benefit Research Institute (EBRI), a nonprofit research organization based in Washington, D.C., raises about the future of employee benefits.
Paul Fronstin, head of the health research and education program at EBRI, noted that the Affordable Care Act levels the playing field like it's never been before, as employees will not necessarily have to depend on getting health coverage through work.
Employers are just not sure if they'll be offering coverage in the future, he added.
In fact, the U.S. Congressional Budget Office estimates that 3 million to 5 million fewer Americans will obtain coverage through their employer each year from 2019 through 2022 than would have been the case without the ACA.
Starting next year, the ACA will require employers with at least 50 full-time employees to offer a minimum level of health coverage to workers, but some employers may prefer to pay a tax penalty instead of paying for the coverage. The need to recruit and retain good talent is what keeps employers offering benefits.
Kathryn Gaglione, a spokesperson for the National Association of Health Underwriters, says, Offering comprehensive, competitive benefits makes for a more robust workforce and better compensation for individuals trying to support families Many American business owners understand the benefit to offering employees and their families coverage. Employer-sponsored health plans might change, but they wont be going anywhere.
Most employees want and expect health insurance through their employer, especially knowing that its much less expensive to receive group coverage that comes with an employers premium contribution than to buy individual coverage on a health insurance exchange (with no employer contribution).
Nonetheless, one could argue workers wont need their employers any more for health benefits once the law is fully implemented, and health exchanges become a viable option to job-based health benefits, Fronstin said.
The EBRI report also discusses a widespread lack of financial preparedness for retirement.
Only 17 percent of the lowest-income households would have enough money to cover 100 percent of average day-to-day expenses like housing, food, and transportation, plus the potentially catastrophic expenses like long-term care, compared with 86 percent of the highest-income households, according to EBRI research.
Not everyone is facing a crisis in retirement readiness. Theres a tremendous amount of variation among U.S. households, said Jack VanDerhei, EBRIs research director. Whether individual circumstances constitute a crisis or not will depend on a number of factors. It's going to depend on your income quartile. It's going to depend on how many years you're eligible to participate in a defined contribution plan. It's going to depend on whether or not you look at long-term care costs.
One of the most important factors in predicting a persons retirement income adequacy is how many years an individual will be working for an employer that provides a defined-contribution retirement plan, VanDerhei said.
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