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Many US employers to drop health benefits -McKinsey

Written by Yahoo News Tuesday, 07 June 2011 23:00

* McKinsey sees "radical restructuring" of health benefits

* Changes seen tied to creation of insurance exchanges

(Reuters) - At least 30 percent of employers are likely to stop offering health insurance once provisions of the U.S. health care reform law kick in in 2014, according to a study by consultant McKinsey.

McKinsey, which based its projection on a survey of more than 1,300 employers of various sizes and industries and other proprietary research, found that 30 percent of employers will "definitely" or "probably" stop offering coverage in the years after 2014, when new medical insurance exchanges are supposed to be up and running.

"The shift away from employer-provided health insurance will be vastly greater than expected and will make sense for many companies and lower-income workers alike," according to the study, published in McKinsey Quarterly.

"While the pace and timing are difficult to predict, McKinsey research points to a radical restructuring of employer-sponsored health benefits."

Among employers with a high awareness of the health reform law, the number likely to drop health coverage for workers rises to more than 50 percent, the report predicted.

Yahoo News

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