Reality Check: Will one-third of employers drop health coverage - Cincinnati News, FOX19-WXIX TV

Reality Check: Will one-third of employers drop health coverage in 2014?

(FOX19) - A report issued this week from McKinsey Quarterly, finds that 30 percent of employers say they will "definitely" or "probably" stop offering coverage in the years after 2014, when new medical insurance exchanges are supposed to be up and running.

Here is how the study breaks down.  McKinsey and Company, which identifies itself as a management consultant that aims to help businesses run more productively and competitively, conducted the survey of more than 1,300 employers earlier this year.  The survey spanned industries, geographies and employer sizes.

Again, the survey found  30 percent of employers say they will "definitely" or "probably" stop offering coverage in the years after 2014.  Why would they drop health insurance all together?

Because the study finds that 30 percent of employers could make more money by dropping coverage, paying the fine and still compensate employees with higher salaries and other benefits.

So how is the White House responding?  They are firing back by pointing out that, "this report is at odds with the experts from the Congressional Budget Office, the Rand Corporation, the Urban Institute and History,"  says a senior administration official to Fox news.

That official also says "history has shown that reform motivates more businesses to offer insurance."

As for the findings from the CBO,  they estimate that only about 7 percent of employees who currently get health coverage through their jobs would have to switch to subsidized-exchange polices in 2014.

Here's what you need to know

Whether employers will actually drop health coverage for employees remains to be seen but the Mckinsey study also found that among employers with a high awareness of the health reform law,  the number likely to drop health coverage for workers wasn't 30 percent.. it was 50%.

And that Reality Check.

http://www.reuters.com/article/2011/06/07/mckinsey-healthexchanges-idusn0712987420110607

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