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McKinsey Projects 30% of Employers Will Drop Health Benefits

Major findings from McKinsey's early 2011 survey of 1,300 employers include:

  • Overall, 30 percent of employers will definitely or probably stop offering employer-sponsored insurance (ESI) in the years after 2014.
  • Among employers with a high awareness of reform, this proportion increases to more than 50 percent, and upward of 60 percent will pursue some alternative to traditional ESI.
  • At least 30 percent of employers would gain economically from dropping coverage even if they completely compensated employees for the change through other benefit offerings or higher salaries.
  • Contrary to what many employers assume, more than 85 percent of employees would remain at their jobs even if their employer stopped offering ESI, although about 60percent would expect increased compensation.

The White House disagreed with the study indicating that the Congressional Budget Office, Rand Corp., and the Urban Institute all found that the existing employer-sponsored model would see little change due to health reform.

Read the complete McKinsey report.

Posted by Cristie Travis at 8:06 PM

Comments

6/17/2011 at 06:41 PM by Cristie Travis

The controversy over McKinsey's survey report are still swirling with the White House and U.S. Congress requesting survey methodology details and more detailed results. Read this article in Business Insurance http://www.businessinsurance.com/article/20110617/BENEFITS03/110619933

It will be interesting to see how this all plays out!


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