Healthcare reform

[lostfan]

Think of it this way... How many companies offer a pension? It died when the government stepped in with social security. History tells me that the same thing will happen here.

My job does, a pretty f***ing bad ass one too by the way, at least according to my limited knowledge of it all - 10% of my salary annually whether I contribute or not

Edited March 24, 2010 by lostfan

[kapkomet]

But the whole purpose of them dropping that benefit and paying the fine was because they were saving a significant amount of money, so there is a benefit to paying the fine instead, and they pocket that extra money...? If it was really zero sum then they might as well keep the benefit.

 

But like Tex said in a roundabout way, now you as an employer look less attractive... it'd be the same thing as offering a lower salary.

 

 

No, it doesn't, because companies almost all companies are going to not offer insurance. It was done by design that the "penalty" is right around the same percentage, on average, as your insurance benefit now. They had the data, and it was written in that way. And no, it wasn't an accident.

 

Just as SS mentioned, pensions are rare, very rare, now. Insurance is going to become the same type of "benefit".

[kapkomet]

guess what guys, many research says that the dropping was going to happen anyways - beginning in this decade, accelerating in the next, it's one of the reasons a lot of steps were created to help the individual market. Employer given health insurance was getting sicker.

 

 

Okay, let's kill the entire system to fix what 20% was broke. (And now Balta steps in with blog about "GOVERNMENT SAVES" and round we keep going). And before you say that's not the truth, I'll say again that the whole bill is "government run health care". Everyone with any forward thinking at all can see what's coming. Hey Mr. Bubble, do you see another one coming? (Hint: insurance stocks... but they won't be "too big to fail".)

[bmags]

There's a reason why wyden-bennet also wanted to blow up employer provided insurance. It was unsustainable. You either fix the problem now or you wait for it all to implode.

[Texsox]

Think of it this way... How many companies offer a pension? It died when the government stepped in with social security. History tells me that the same thing will happen here.

 

How many companies offer 401Ks and even offer matching? I believe it was self directed 401ks that killed pensions. Especially those pensions tied to the fortunes of one company.

[hogan873]

I suppose I'm one of the many who are on the fence regarding the healthcare reform. The main reason I am on the fence is that, like a lot of people, I am uninformed. The problem right now is that much of what you see on social networking sites and blogs has become misinformation.

 

I have a good health insurance plan with my employer, one that includes $3 prescriptions and a one-time coverage of $500 for Lasik. And I suppose that may be the biggest reason why I'm on the fence about the bill.

 

What makes me shake my head are the conservatives who are spreading the misinformation and spouting off quips like "I'm moving to New Zealand!" I want to tell them that New Zealand has government run healthcare, but the argument is not worth it. I'm not saying that all those opposed are uninformed, but I have a sneaking suspicion that if a republican president had introduced a healthcare reform bill, the same ones that are screaming and crying would be lauding it as the best thing ever.

[NorthSideSox72]

In the best case scenario, health insurance shouldn't really be an employment-linked thing anyway. Problem is, as companies drop it, they won't increase salaries to adjust for it, and you just burdened the population with effectively less income.

 

Good news is, most employers aren't going to drop it in the short term, if at all. I'm convinced its here to stay, though there will probably be a few percentage point drop off in the next few years.

 

[Balta1701]

In the best case scenario, health insurance shouldn't really be an employment-linked thing anyway. Problem is, as companies drop it, they won't increase salaries to adjust for it, and you just burdened the population with effectively less income.

 

Good news is, most employers aren't going to drop it in the short term, if at all. I'm convinced its here to stay, though there will probably be a few percentage point drop off in the next few years.

This bill enshrines employer-provided insurance and actually strengthens it quite a bit by making it possible for small businesses to afford insurance.

 

What no one has said so far in last night's discussion, and I'm half surprised and half not surprised...is that there's a reason why employers still provide insurance...and that's the GIGANTIC tax subsidy for health benefits. Even after the excise tax begins to kick in 7 years down the road, the government is still going to be providing a huge tax advantage for companies to purchase health benefits for their employees by making those benefits tax deductible up to a certain point.,

 

Employers are planning to drop insurance because of this bill? That's insane on their part. First of all, if the employer cuts 20% of his or her employees off of his or her insurance plan, and they can't get into the exchanges...their own insurance rates are going to go up because they're less of an important buyer.

 

But then on top of that, if the employee has to go and buy his or her own health insurance, even in the exchanges, the company refusing to provide insurance is at a huge tax disadvantage relative to a company providing insurance.

 

Simple math really. $15,000 a year insurance plan, $35,000 a year employee salary versus $50,000 a year salary, except in the 2nd case, your employee has to pay tax on the full $50,000, while in the former case, the employee pays taxes on $35,000.

[Y2HH]

How many companies offer 401Ks and even offer matching? I believe it was self directed 401ks that killed pensions. Especially those pensions tied to the fortunes of one company.

 

Not many anymore. A lot of companies used to do that, but most don't match these days. Since the economy dropped, companies realize they don't need perks to keep people on board, so they've cut back on such things and it will probably remain this way for the foreseeable future.

 

If your company doesn't match on 401k, there is no point in using it, as you can do it yourself with more options available as to what you can invest in.

 

And as another poster said (Northside), if your company decides to drop your heath care, they won't magically increase anyone's salaries, they'll keep the difference (if any) on the fines incurred. Think of inflation...if inflation were to rise, your company wouldn't be so kind as to give you a huge raise to match it, either. You'd make the same, but it would be worth less.

[NorthSideSox72]

Not many anymore. A lot of companies used to do that, but most don't match these days. Since the economy dropped, companies realize they don't need perks to keep people on board, so they've cut back on such things and it will probably remain this way for the foreseeable future.

 

If your company doesn't match on 401k, there is no point in using it, as you can do it yourself with more options available as to what you can invest in.

 

And as another poster said (Northside), if your company decides to drop your heath care, they won't magically increase anyone's salaries, they'll keep the difference (if any) on the fines incurred. Think of inflation...if inflation were to rise, your company wouldn't be so kind as to give you a huge raise to match it, either. You'd make the same, but it would be worth less.

I think you are off on the 401k thing - pretty sure the precentage of firms with 401k's continues to rise, and I don't know of a single firm anywhere that has 401k's without SOME sort of matching. The issue is that at many firms, the match rate is partially or wholly dictated by the firm's performance, so right now, the match % will tend to be lower.

 

[Y2HH]

This bill enshrines employer-provided insurance and actually strengthens it quite a bit by making it possible for small businesses to afford insurance.

 

What no one has said so far in last night's discussion, and I'm half surprised and half not surprised...is that there's a reason why employers still provide insurance...and that's the GIGANTIC tax subsidy for health benefits. Even after the excise tax begins to kick in 7 years down the road, the government is still going to be providing a huge tax advantage for companies to purchase health benefits for their employees by making those benefits tax deductible up to a certain point.,

 

Employers are planning to drop insurance because of this bill? That's insane on their part. First of all, if the employer cuts 20% of his or her employees off of his or her insurance plan, and they can't get into the exchanges...their own insurance rates are going to go up because they're less of an important buyer.

 

But then on top of that, if the employee has to go and buy his or her own health insurance, even in the exchanges, the company refusing to provide insurance is at a huge tax disadvantage relative to a company providing insurance.

 

Simple math really. $15,000 a year insurance plan, $35,000 a year employee salary versus $50,000 a year salary, except in the 2nd case, your employee has to pay tax on the full $50,000, while in the former case, the employee pays taxes on $35,000.

 

Where you get this wrong is that you magically give the money to the employee that the company was paying in health care costs.

 

That's not reality.

 

Reality is this...I'll fix it for you.

 

"Simple math really. $15,000 a year insurance plan, $35,000 a year employee salary versus $35,000 a year salary, except in the 2nd case, your employee has to pay tax on the full $35,000, while in the former case, the employee pays taxes on $35,000."

 

The company will NOT hand that money back to the employee, they'll keep it. In this economy, there isn't much you can say, either. Be happy you're employed. And it's going to be like this for a while before employees have any sort of leverage or negotiating power with companies.

 

There are millions of unemployed out there that'll take that 35,000$.

[Y2HH]

I think you are off on the 401k thing - pretty sure the precentage of firms with 401k's continues to rise, and I don't know of a single firm anywhere that has 401k's without SOME sort of matching. The issue is that at many firms, the match rate is partially or wholly dictated by the firm's performance, so right now, the match % will tend to be lower.

 

None of my friends companies match anymore, they did...but they stopped. And while that's a small sample size, the fact that they all had match and no longer do leads me to believe it wasn't just a few companies that did this.

Edited March 24, 2010 by Y2HH

[NorthSideSox72]

None of my friends companies match anymore, they did...but they stopped.

I have honestly never heard of that. I've known lots that either don't have and never had 401k's (usually small firms), and plenty of people saying that the match level has dropped. But unless the firm is in dire financial straits, I've never heard of matching just disappearing.

 

I'd be curious to see some actual data on this though. I wonder if anyone tracks this sort of thing.

 

[Y2HH]

I have honestly never heard of that. I've known lots that either don't have and never had 401k's (usually small firms), and plenty of people saying that the match level has dropped. But unless the firm is in dire financial straits, I've never heard of matching just disappearing.

 

I'd be curious to see some actual data on this though. I wonder if anyone tracks this sort of thing.

 

I'm curious about it too, now that you got me thinking about it.

 

My company still matches, obviously, but out of my entire group of friends, I'm the only one with a match these days.

[Balta1701]

I have honestly never heard of that. I've known lots that either don't have and never had 401k's (usually small firms), and plenty of people saying that the match level has dropped. But unless the firm is in dire financial straits, I've never heard of matching just disappearing.

 

I'd be curious to see some actual data on this though. I wonder if anyone tracks this sort of thing.

Recent economic woes have had a decided impact on the funding of defined contribution plans. According to the Retirement Plan Survey: Discovering new trends and overcoming challenges, conducted by Grant Thornton LLP, Drinker Biddle & Reath and Plan Sponsor Advisors, one fourth (26%) of employers have either scaled back their contributions or eliminated the company match altogether in an effort to reduce costs. What’s more, some employers are in no hurry to reinstitute previous benefits: among those who have scaled back or eliminated contributions, 53 percent have not yet decided whether to return to previous levels in 2010, and 33 percent have no plans to do so.

Link

[Y2HH]

Link

 

That's the sad reality.

[StrangeSox]

Where you get this wrong is that you magically give the money to the employee that the company was paying in health care costs.

 

That's not reality.

 

Reality is this...I'll fix it for you.

 

"Simple math really. $15,000 a year insurance plan, $35,000 a year employee salary versus $35,000 a year salary, except in the 2nd case, your employee has to pay tax on the full $35,000, while in the former case, the employee pays taxes on $35,000."

 

The company will NOT hand that money back to the employee, they'll keep it. In this economy, there isn't much you can say, either. Be happy you're employed. And it's going to be like this for a while before employees have any sort of leverage or negotiating power with companies.

 

There are millions of unemployed out there that'll take that 35,000$.

 

Your scenario assumes the current economic/ employment situation continues at least through 2014, when most of these provisions in the bill will take effect.

[StrangeSox]

That's the sad reality.

 

My previous employer suspended 401(k) matching, so I stopped contributing. Like you mentioned earlier, there's better options and more control on your own.

[NorthSideSox72]

Link

Interesting. 26% either scaled back or dropped it. I wonder what portion of each is in there? Article doesn't seem to say.

 

And honestly, I'm shocked its only 26% that did one or the other - I thought the % would be higher.

 

[Y2HH]

Your scenario assumes the current economic/ employment situation continues at least through 2014, when most of these provisions in the bill will take effect.

 

The problem is that even when the economy does get better, employers are always SLOW to start offering added benefits and perks to attract new employees when the market is flooded with people looking for jobs. For the next 10 years or so, employers will have most of the negotiating power, and yes, it will take that long.

 

We aren't out of this mess yet...the EU is collapsing before our eyes and a lot of people don't realize it yet.

 

This may get worse before it starts to get better in a real way. We've seen nothing but a rise in the stock market, but employment rates have hardly moved, despite huge government hiring sprees.

[southsider2k5]

Interesting. 26% either scaled back or dropped it. I wonder what portion of each is in there? Article doesn't seem to say.

 

And honestly, I'm shocked its only 26% that did one or the other - I thought the % would be higher.

 

You'd have to know what percentage didn't offer it at all for it to me more relevant.

[NorthSideSox72]

The problem is that even when the economy does get better, employers are always SLOW to start offering added benefits and perks to attract new employees when the market is flooded with people looking for jobs. For the next 10 years or so, employers will have most of the negotiating power, and yes, it will take that long.

 

We aren't out of this mess yet...the EU is collapsing before our eyes and a lot of people don't realize it yet.

 

This may get worse before it starts to get better in a real way. We've seen nothing but a rise in the stock market, but employment rates have hardly moved, despite huge government hiring sprees.

Nothing I've read is pointing to anything that dramatic. Problems indeed, but nothing like a whole new collapse over there. Where are you getting that from?

 

[Y2HH]

Nothing I've read is pointing to anything that dramatic. Problems indeed, but nothing like a whole new collapse over there. Where are you getting that from?

 

A solution to Greece's budget woes remains elusive for the EU. Now, Fitch's downgrade of Portugal reminds investors, again, that Athens is not alone in the dark.

 

Give it time. More dominoes will be falling.

 

The whole point of the EU was to "union" together and help each other, keep things stable, etc...but now that cracks are forming and the EU is basically saying "err, we can't actually help you...", the small crack becomes a large fissure...other nations in the EU say, WTF was the point of the EU if they can't do anything when trouble arises? They're looking for international relief on these issues now...and believe me, more countries over there are going to be crawling out of the woodwork soon with similar debt issues.

Edited March 24, 2010 by Y2HH

[Rex Kickass]

A solution to Greece's budget woes remains elusive for the EU. Now, Fitch's downgrade of Portugal reminds investors, again, that Athens is not alone in the dark.

 

Give it time. More dominoes will be falling.

 

There was a lot of debate, in the first place, about whether countries like Portugal, Greece and Italy made sense to be in the Eurozone to begin with IIRC. It's not necessarily endemic of any systemic risk in the EU.

[Texsox]

After two years of focusing on the bottom line, many companies that stopped matching employees' 401k contributions plan to restore the benefit this year.

 

Earlier this month, human resources consultant Hewitt Associates released the results of a survey of 162 midsize to large U.S. companies, representing a pool of 5.7 million employees. Among companies that had suspended or reduced matching retirement contributions last year, 80% responded that they plan to restore them this year.

 

Many companies are taking steps to ensure that retirement plans are strengthened, seeing the benefit as crucial to a productive work force and employee retention. Only 54% of employers who took part in the survey said they were confident about their workers' ability to retire with sufficient assets, down from the 66% in 2009, according to the Hewitt survey.

http://articles.moneycentral.msn.com/learn...a-comeback.aspx