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http://money.cnn.com/2010/05/05/news/companies/dropping_benefits.fortune/index.htm?cnn=yes&hpt=C2
This is an interesting article discussing some of the unintended consequences that might arise from Obama's Health Care reform. Many large companies such as ATT and Verizon have considered dropping their health care benefits for employees and simply paying the government penalty. What do you think about these interesting predictions within this article about how detrimental this trend could be for our budget deficit?
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I think it is only appropriate that every company "asses" the costs and benefits of the new plan but I really doubt that these companies will cut healthcare. The reason they had it in the first place was to attract the highest quality talent, that reason for providing it has not gone away. If they got rid of their healthcare, any employee who was able to would be very likely to flea the company for greener pastures (not to mention the contract nightmares they would have to go through to get out of those deals). I think this is an interesting part of the debate that likely should have come out much earlier, but I'm not THAT concerned.
ReplyDeleteIt's interesting to hear about that because I've heard very little about this being a strategic possibility or cost cutting measure for companies. I agree with Tommy though, a job doesn't sound too glamorous when it is offered without health care. They could possibly get away with this now since it is so hard to find a job anywhere, but after the economy begins to rebound they will surely see a drop in talent.
ReplyDeleteUnlike Ryan, I have heard quite a bit of companies predicting to do this. Many companies say it will be cheaper, and their employees will be able to cover themselves so they will drop their benefits. When the economy slowed down, a lot of companies already dropped health insurance, and I'm sure they will not get it back.
ReplyDeleteAnyway to cut costs means more profits and greater shareholder value. If these companies can cut costs this way, then they will absolutely do it. Why provide health insurance if you do not have to? Unless it is some high up position where you need to attract special talent, there is no reason to add costs because most people would be thrilled to have any kind of job right now.
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