Companies & Industries

What Won’t Change Under Obamacare: Health Care Is Still a Key Recruitment Tool


Lost in the political battles surrounding the Affordable Care Act is the original reason companies began to offer health-care insurance: It was seen as a way to attract and retain employees. It still is an important tool.

With the Affordable Care Act going into effect Jan. 1, 2014, it’s too early to tell if it will help control skyrocketing health-care costs. One thing is clear: Thanks to an improving economy and job market, few companies will opt for the radical decision to drop employee health-care benefits, as had been predicted by opponents of Obamacare.

A recent survey by outplacement consultancy Challenger, Gray & Christmas, found that 82 percent of companies polled plan to continue providing health-care coverage—despite climbing costs and the possibility that trend will continue. The survey discovered what most of us already know: Companies are passing along a bigger slice of higher health-care costs to employees. One in three employers said it moved to higher plan deductibles. More than half of the companies are trying to keep cost under control by adding employee wellness programs. Challenger surveyed 100 human resources executives.

Warns John A. Challenger, chief executive officer of Challenger, Gray & Christmas: “Companies that opt to drop employee health insurance in 2014 may soon find out just how valuable a retention tool those benefits are.”

As the economy improves and the competition for workers heats up, maybe employers will reassess those higher deductibles. After all, low health-care costs could be a recruitment tool.

Sager is director of special projects for Businessweek.com.

Steve Ballmer, Power Forward
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