U.S. House Ways & Means Committee Releases Report on PPACA’s Financial Incentives for Employers to Drop Health Coverage

On Tuesday, the U.S. House Ways and Means Committee released a report entitled “Broken Promise: Why ObamaCare Will Force Americans to Lose the Health Care Coverage They Have and Like.”  The report follows Committee Chairman Dave Camp’s (R-MI) letters to the CEOs of the Fortune 100 companies – 71 of whom responded.  Highlighting aggregate data the panel received from the companies, the report builds a narrative around the fiscal incentive that employers may have to drop employer-sponsored health insurance as a result of the Law.  According to the report, these employers could save hundreds of millions of dollars a year under the new Health Care Reform Law by simply dropping their employer-sponsored health insurance and moving employees into the Law’s new health Exchanges. 

Based on the report’s data, if all 71 respondents stopped offering health care and instead paid the employer mandate penalty they could save a total of $28.6 Billion in 2014 (an average savings of over $400 Million per company) and $422.4 Billion from 2014-2023 (an average savings of nearly $6 Billion per company).  In a statement, Camp said, “The findings of the report, along with existing research, show that the Democrats’ health care law threatens the stability and sustainability of the employer-based health insurance system.  Anyone who gets insurance through their job should be worried about what will happen next, because there is a distinct financial incentive for employers to terminate health care coverage under the Democrats’ health care law.”