Obamacare and you

[OttoVonBismarck]

Yeah.  Sure it will.

And I'm not even making a Money-esque CURSE YOU SHAREHOLDER VALUE point, though I share the sentiments.  Wage stickiness is an observable economic concept.

This, employer contributions are typically a decent chunk of change. Awhile back to convince us how great it was to work at the Federal government they put up a little app on the intranet showing your "total compensation." This was their derived value for your salary + health insurance benefit + derived present value of your pension + matching contributions to TSP. Anyway, the amount they put in as "their contribution" to my health insurance was something like $5,000 a year.

Now imagine I work for say, Grumman or Lockheed or something instead of the Feds. If the company announces they are discontinuing their health plans and we are welcome to go to the exchanges, I obviously am way out of subsidy range, do you expect the corporate employers to automatically increase my salary by $5,000? Actually, I do expect some to do that, for their higher skilled employees. But many will not, and that just means less money in your pocket at the end of the day.

[DGuller]

If they don't increase your pay to compensate, then the implication is that they overpaid you to begin with.  I doubt that corporations would be okay with overpaying their employees, considering that they're the biggest expense.  Of course, there may be lots of other real-world factors at play that would poke holes in this simplistic Econ 101 thinking.

[grumbler]

The whole issue of employer decision-making regarding health care just shows, IMO, the major flaw in Bushcare that Obamacare didn't even attempt to fix:  employers shouldn't be in the health care business!

[MadBurgerMaker]

Well I was able to create an account, verified it, etc, but now it is saying they don't have an account that matches the information given to them, even after having a password reset link sent to the email associated with my username, etc. 

E:  Yay it took it now!  Boo "Unexpected error. Error ID <blank space>"

[Ideologue]

If they don't increase your pay to compensate, then the implication is that they overpaid you to begin with.  I doubt that corporations would be okay with overpaying their employees, considering that they're the biggest expense.  Of course, there may be lots of other real-world factors at play that would poke holes in this simplistic Econ 101 thinking.

I think the big one is that one's salary/wage is considered compensation, and benefits (of any type to some degree, but health insurance especially) are considered extras.  You can't make house payments with your BCBS coverage.

[Sheilbh]

I think the big one is that one's salary/wage is considered compensation, and benefits (of any type to some degree, but health insurance especially) are considered extras.  You can't make house payments with your BCBS coverage.

What's the difference to the employer?

It'll be interesting to see actually. There's no other country that's had healthcare primarily provided via employers so who knows what'll happen

[Admiral Yi]

I disagree Ide, but i also think the issue will become moot once the individual mandate kicks in.  Then people will know very clearly that either they get a job with insurance, buy it on an exchange, or pay 1% of income to Tio Samuel.

[Ideologue]

I think the big one is that one's salary/wage is considered compensation, and benefits (of any type to some degree, but health insurance especially) are considered extras.  You can't make house payments with your BCBS coverage.

What's the difference to the employer?

The difference is that they'll find they can start paying their employees (even) less.

I suspect/fear that it will very similar to what they found out after 2008.  It turned out that there were a lot of employees that companies didn't really need.  They may well slap their collective foreheads once compensation is cut, realizing that they could have been doing this all along.  In a lot of ways, Obamacare may wind up unstickying wages that may be, at present, "artificially" high.

Of course, the countervailing pressures you and Yi describe are not figments.  As you say, who knows how it will ultimately work out.

[Sheilbh]

The difference is that they'll find they can start paying their employees (even) less.

I look at it the other way. I wonder how much healthcare inflation, mostly borne by employers, is part of the stagnation of wages? Anyone have an idea?

Edit: And as I say it's a mystery how this'll turn out.

[Admiral Yi]

I look at it the other way. I wonder how much healthcare inflation, mostly borne by employers, is part of the stagnation of wages?

I've thought the same thing.

[OttoVonBismarck]

If they don't increase your pay to compensate, then the implication is that they overpaid you to begin with.  I doubt that corporations would be okay with overpaying their employees, considering that they're the biggest expense.  Of course, there may be lots of other real-world factors at play that would poke holes in this simplistic Econ 101 thinking.

Once the employer mandate is in effect they'll be paying a penalty for every employee they've dropped. IIRC it was like $4,000 a year, so in my example where they were previously paying $5,000/yr for my coverage (this is how much my employer has actually said my health insurance costs them), a private company would save the $5,000 from my compensation but then owe a $4,000 penalty. So they come out $1,000 ahead, even if they pass it on to me, it's only going to be $1,000--not the $5,000 they were paying me before. They would have to actually increase my total compensation to return $5,000 to me directly.

[DGuller]

If they don't increase your pay to compensate, then the implication is that they overpaid you to begin with.  I doubt that corporations would be okay with overpaying their employees, considering that they're the biggest expense.  Of course, there may be lots of other real-world factors at play that would poke holes in this simplistic Econ 101 thinking.

Once the employer mandate is in effect they'll be paying a penalty for every employee they've dropped. IIRC it was like $4,000 a year, so in my example where they were previously paying $5,000/yr for my coverage (this is how much my employer has actually said my health insurance costs them), a private company would save the $5,000 from my compensation but then owe a $4,000 penalty. So they come out $1,000 ahead, even if they pass it on to me, it's only going to be $1,000--not the $5,000 they were paying me before. They would have to actually increase my total compensation to return $5,000 to me directly.

Why would a company even go for such an arrangement?  It is effectively making its employees pay $4000 to the government for absolutely no gain for itself.

[OttoVonBismarck]

Why would a company even go for such an arrangement?  It is effectively making its employees pay $4000 to the government for absolutely no gain for itself.

I would speculate on several different reasons, some employers have already announced they are ending traditional health benefit plans and accepting the fact they will be paying the penalty once it is assessed. So obviously some portion of employers are indeed making these decisions.

[CountDeMoney]

Disagree Moldy.

"Do they have health insurance" is a fairly standard question for people job-seeking.  Tossing people on exchanges will, in my estimation, decrease their supply and drive up cash compensation.

I agree.  Companies might get away with shortchanging employees on compensation by failing to balance lack of health care with increased pay to allow the employee to afford it in the current economic climate, but in the long run that will cost them their good people.

LOL, "cost them their good people"...Their "good people" will stay and fucking take what they're given, all the way up the ass.  What are they going to do?  Leave in this job market?  Maybe the Senior Associate Vice President of Human Resources or the Senior Director of IT Support - Applications, but that's about it. 

But the rest of the worker bees will take the elimination of employer contributions to healthcare plans and get tossed to the exchanges without the equivalent increase in wages, and they'll fucking eat it and smile, as usual.

[merithyn]

Why would a company even go for such an arrangement?  It is effectively making its employees pay $4000 to the government for absolutely no gain for itself.

I would speculate on several different reasons, some employers have already announced they are ending traditional health benefit plans and accepting the fact they will be paying the penalty once it is assessed. So obviously some portion of employers are indeed making these decisions.

They're making these decisions now, but there's no way to know how long they'll continue in that manner. The reality is that for the next 18 months to two years, a lot of things are going to change regarding employee compensation, benefits, and government intervention on both of those. Obamacare will not remain as it is, and companies will not stick to whatever high-handed ideologies they have at the moment.

Things will shake out in the wash in a way that can't be expected right now. I don't know if it will be for good or bad, but it will certainly change things dramatically.