Which Employers Will Drop Coverage?

Andrew Sullivan —  May 16 2013 @ 8:26am

Next year when Obamacare comes into effect, Casey B. Mulligan expects certain employers with lots of low-wage workers to stop offering health insurance:

To qualify for subsidized exchange plans, workers cannot be offered affordable insurance by their employers. Paradoxically, employers will create subsidy opportunities for their middle- and low-income employees whenever they fail to offer health insurance.

On the other hand, an employer dropping its health insurance next year will put its high-income employees in a tough spot, because they will have to buy insurance on their own without the tax advantages they had in the past by obtaining health insurance through their employer. As a result, employers with relatively many high-income employees will be under pressure to keep their insurance, whereas an employer of middle- and low-income employees may find them asking for health insurance to be dropped from the employee benefit menu.

Recent Dish on healthcare reform’s nightmare scenarios here.