Friday, March 29, 2013

Cost of health care mandate: not an easy exercise

Yesterday's WSJ ran a piece that gave some new insights into how the new health insurance mandate will affect employer costs and insurance coverage.  Fast food chains such as Wendy's, Chipotle, Popeye's and Jack in the Box are now lowering their cost estimates because they think many employees will decline the opportunity to have employer-sponsored health insurance.  The premiums charged by these companies will end up being cheaper than the fine on the employee for not being covered, so many will just pay the fine.  Others will rely on Medicaid or coverage from other family members. 

Recall, however, that other chains are doing everything they can to keep worker hours under 30 per week so they are not covered by the new mandate.  So the overall effect on disposable income for employees and cost to employers remains to be seen.  And at the end of the day, how much will health insurance coverage actually expand?

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