The fine for not providing health insurance coverage is $2000? Then why provide coverage?

[AngryAmish]

$2000 is a lot less than most plans nowadays. If this is true then why would any employer not just get rid of insurance?

on edit: I think my numbers are right but if I am wrong by all means pease correct me.

[TheOther95Percent]

1. Good Question

I believe fines and penalties are not deductible for corporate tax purposes while payments for providing medical insurance would be. Even with the added tax benefit, I'm not sure it wouldn't be a whole lot less expensive to dump the insurance coverage.

[JDPriestly]

2. Because a decent employer who wants loyalty and good faith from

his or her employees and is large enough to be required to provide insurance should not have to be forced into doing so in the first place.

There is something sick about an employer refusing to provide health insurance to employees in our system.

[AngryAmish]

4. It might be construed that you are implying that government healthcare is somehow sub-standard

This is the government. I am sure that their health care will be the best.

[JDPriestly]

10. I was responding to the query about why the fine is so low.

A fine should not be needed. Employers should want their employees to have good health care. I'm sure the health care under the new bill will be good and I'm glad that more people will be receiving it.

[madokie]

5. Whats sick is there is an insurance company between you and your doctor

They add nothing of value especially in this case, don't you think?

[riderinthestorm]

6. I don't think companies value their employees in the way you think they do

And I'd go even further and say that tying health care to employment is a big mistake. That needs to be untethered asap. It's in our own best interest if most corporations drop coverage and everyone has to buy it themselves - that will create the grassroots pressure necessary to change the system imho.

Otherwise we're going to be stuck with the insurance middleman for a very, very long time.

[Fumesucker]

8. All but the smallest employers seem to have been taken over by the MBA mentality..

In which employees are simply another resource to be exploited to the maximum short term profit.

[Yo_Mama]

9. A lot of companies can't afford it.

If you have a whole lot of employees earning not that much (think Walmart or Target or Lowe's or McDonald's) and you are mandated to provide a "strong" package of insurance, the cost to you per employee will be very high and will raise your costs. Those have to be made up in profits.

But if you find yourself competing against a company in the same line of business which is paying 2K per employee in fines, whereas you are paying 6K per employee in insurance costs, you will not be able to make up those costs and you will be forced to drop insurance by the market.

When Kroger's has a profit margin of 0.95%, it doesn't leave a whole lot of room for extra costs compared to their competitors:
http://ycharts.com/companies/KR/profit_margin

Competition among chains in the mass consumer market is already intense enough that many stores have gone to de facto part-time policies and are discriminating against older workers.

These are not market forces that we can afford to ignore.

[ProSense]

3. Well,

I hope they all opt out and put this country on a faster path to single payer.

[Yo_Mama]

7. A lot of employers will

That's the untold truth for ObamaCare - it shunts a lot of employees off employer health insurance. They then go through the exchanges. Most of the workers get a subsidy, and the average subsidy will be worth much more than the fine.

[JDPriestly]

11. The ultimate outcome is hard to predict.

But I think in a way that outcome depends on the insurance companies. If they lower their prices, they will protect their profits. But if they become too expensive, people will demand a single payer plan.

[TheKentuckian]

12. I hope they all see the light and drop us all so that we can be free of the stupid employer based

system.