PPACA and Employers

One of the more suspenseful issues of PPACA (aka  Obamacare) is the question of employer conduct in 2014 and after.

Question is, will employers drop health insurance and punt workers into the state exchange system? Some new perspectives have been added to the debate. (Both assume PPACA will not be repealed or materially altered before 2014, an issue to be settled by the 2012 election.)

The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT)  have weighed in on the question (https://www.cbo.gov/publication/43082) . (Warning, very long)

This report tries to cover multiple options and scenarios, but I think it comes to a Goldilocks conclusion, not to hot and not too cold, but something in the middle of the range of possibilities.

A McKinsey and Company (MC) study (http://www.mckinseyquarterly.com/How_US_health_care_reform_will_affect_employee_benefits_2813) reaches much different conclusions.

McKinsey sees up to 30% of employers dropping employer–sponsored insurance (ESI), and perhaps more as awareness spreads and 2014 approaches.  MC also suggests exploration of any number of employer options, some good for employees, some not.

My spin? If the labor market remains weak, and underemployment and limited employee options continue, more employers will drop ESI and employees will have little so say or do about it.

There is a lot to digest here. More analysis required.