Great: It Seems that Employer-Provided Health Insurance is Going the Way of the Pension Plan

It looks like everyone is going on the Obamacare exchanges if this guy is right.

Rick Lindquist, president of Zane Benefits, which specializes in individual health insurance reimbursement for small businesses, says: Not only could it happen; it’s happening already.

Lindquist and Paul Zane Pilzer (who founded Zane Benefits), argue that case in their new book, “The End of Employer-Provided Health Insurance.” As surprising as you may find the title, get a load of its subtitle: “Why It’s Good for You, Your Family and Your Company.”

This is how Company Insurance is going to be in the post Obamacare era:

The easiest way is to provide a stipend. In your paycheck, you might get $500 a month as your health insurance stipend. The problem is that money is taxable; it’s not like group health insurance.

At Zane Benefits, we have a solution to that. We establish a formal reimbursement program that complies with federal tax rules. We say: There’s $500 a month but you only get it if you buy coverage and prove you bought it.

The key is that you can have whatever you want when you shop on the individual market. And now you’re required to be an educated consumer.

However, it will probably put quite a few people into Bronze plans with their draconian co-pays. That will not be good for many consumers and there will probably be a backlash. Most employees have fairly decent plans purchased through the heft of the companies they work for. With that purchasing power stripped away consumers might be at the mercy of insurance companies.

According to this a platinum plan is $436 a month so a $500 stipend would cover it. However, the max out of pocket is $4000 for a single and $8000 per family. That is a huge amount when co-pays are fairly low on employer provided plans. I can see people postpone getting health care for little junior because they don't have $8000 saved in case that their bill is that massive. The Bronze plan's copay is $12,700 for a family plan and that would probably eat up quite a few emergency funds in a big gulp. Maybe providing a copay loan is a lucrative new business for some banks to get into.