COBRA And Healthcare: Healthcare Expenses Passed Off To Employees

By William Finch on September 3, 2010, 4:35 pm Posted in Finance News

As the end of the fiscal year approaches for many businesses, employees can prepare to see a significant increase in their health insurance costs with the new year. Insurance companies are already preparing for the new health care regulations to take effect and have begun to raise their premiums. Cash strapped companies are passing these additional costs directly to the employee. Those who are unemployed and using COBRA can also expect to see rising costs in the new year. At a time when people are already struggling, it does not seem right for insurance costs to rise. So why aren’t the companies shouldering some of the burden?

Corporate Responsibility And Health Insurance

Many companies willingly pay a portion of health insurance benefits. Some insurers even require the company to pay a specific amount to qualify for a discounted policy. When health insurance premiums rise, management must figure out where to get the money from to cover the expense. Unfortunately, with cash strapped companies barely being able to keep their doors open, that burden is going to fall on to the employee. Management must decide to lay off personnel, cut benefits or stop pay increases to cover these costs, none of these scenarios are good. Many opt for letting the employee shoulder the burden instead of downsizing again.

 

What Is The Answer?

Insurance companies must become more cost effective for the insured. This does not include cutting benefits, but perhaps cutting bureaucracy. Companies must demand fair trade practices so that they can generate growth and employment. The tax burden on employees and employers must be lifted. These are the only workable solutions to the problem. Current political strategies to handle this crisis are, in fact, making the situation worse. This trend will continue until the issue of nationalized heath care is finally resolved.

Related posts:

1. Health Care Insurance Costs Rise For All – Employer And Employee
2. Cigna CEO: Healthcare Reform Bill Doesn’t Stop Upping of Premiums
3. Health Care Bill: Impact On Small Businesses Not Fully Known Yet
4. Health Care Reform Bill Causes Boeing To Change Employee Coverage
5. Healthcare Reform Bill: The Effects Of This Healthcare Reform