Feature

Why employer-sponsored health care is headed for a fall — in one revealing chart

Companies won't be able to resist letting the feds provide health care

The shoe hasn't dropped yet, but in the next few months or years, big, successful corporations in the S&P500 are likely to do the unthinkable — stop offering employer sponsored health insurance to their employees.

Why? The combination of penalties imposed by ObamaCare on so-called "Cadillac plans" as well as potential savings are impossible to ignore if you're in the C-suite and responsible to investors. A new report by S&P Capital IQ shows exactly why companies can't resist shifting the burden of providing health care to the feds. The report says:

  • By shifting insurance to the employee, the Affordable Care Act presents an opportunity for U.S. companies to radically redefine the role they play in the health care system.
  • The ACA could save S&P 500 companies nearly $700 billion through 2025, about 4 percent of those companies' current market capitalization.
  • If all U.S. companies with 50 or more employees made the switch, the total savings to businesses could be as high as $3.25 trillion through 2025.
  • The shift benefits employers the most as the government and consumers take on a larger funding role.

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