The death of employer-sponsored health insurance has been greatly exaggerated.
The majority of employers that offered workers insurance before the Patient Protection and Affordable Care Act (PPACA) was implemented continue to do so today.
In fact, according to an analysis by the Kaiser Family Foundation, the percentage of adults under 65 with employer-sponsored coverage has been flat in the years since President Obama signed the landmark act into law six years ago.
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Many anticipated that companies would drop coverage because the PPACA made it easier, particularly for those with preexisting health conditions, to purchase individual insurance policies.
However, a couple of important factors overshadowed that apparent incentive for companies to tell workers to buy coverage themselves.
First, the PPACA levies financial penalties on employers that do not offer coverage to full-time workers.
And second, the PPACA did not scrap the enormous tax break that employers get by compensating workers through benefits, rather than wages. Although the original legislation included a provision that would have subjected the most expensive health benefits to payroll taxes beginning in 2018, Congress voted late last year to delay the implementation of that provision — dubbed the "Cadillac Tax" — for another two years. Many assume that the proposal, which was aimed at reining in rising health costs but remains unpopular in both parties, will be delayed indefinitely.
"The employer-based system is alive and well," Jeff Alter, CEO of UnitedHealthcare, told the New York Times.
Indeed, it is because of the thriving employer-based market that UnitedHealth can threaten to abandon its Obamacare business, which only accounts for a sliver of its customers.
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