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30 percent of employers to stop offering health insurance in 2014, says McKinsey and Co.
By Insure.com staff

A new report by McKinsey & Co. says 30 percent of employers will definitely or probably stop offering health insurance benefits to their employees after 2014 when state health insurance exchanges are scheduled to open.

The proportion increases to more than half among employers highly aware of health reform, according to the report, based on a survey of 1,300 employers across industries.

The findings contrast sharply to projections by the Congressional Budget Office, which estimated 7 percent of employees would lose employer-sponsored coverage in 2014, and studies by the Urban Institute, The Rand Corp. and Mercer, all of which projected minimal change in the number of employers offering health insurance.

Obama administration officials dispute the report

White House Deputy Chief of Staff Nancy-Ann DeParle called the McKinsey study an "outlier" and pointed to Massachusetts, where statewide health reform was structured similarly to national health reform.

"Since reform was enacted in Massachusetts more than five years ago, the number of individuals with employer-sponsored insurance in Massachusetts has increased," DeParle wrote in a White House blog. "And job growth in Massachusetts has kept pace with other New England states and the nation."

According to the McKinsey report, more than 85 percent of employees would stay at their jobs even if their employers stopped offering health insurance, although about 60 percent would expect increased compensation.

"The new law guarantees the right to health insurance regardless of an individual's medical status," the report states. "In doing so, it minimizes the moral obligation employers may feel to cover the sickest employees, who would otherwise be denied coverage in today's individual health insurance market."

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