Individual Health Insurance to Supplant Group Coverage?
Companies are exploring innovative ways to rein in rising health premiums. Giving monthly stipends to individual employees may be one option.
By Garry Kranz Comments 0 | Recommend 0
Doctor Bills:USA Today notes a possible new trend emerging in how companies
provide employee benefits. Rather than provide annual group coverage, some firms
instead are switching to individual coverage in which employees receive a
monthly stipend to be used for purchasing their own health insurance. The
newspaper cites the “controversial approach” as one solution employers are
considering as they seek to curtail the soaring costs of providing health
benefits. “The shift is touted as a lower-cost way for employers to offer
workers some kind of health coverage, while making smaller and more predictable
financial contributions toward that coverage,” USA Today reports in its January
29 edition. However, the newspaper also notes one of the obstacles toward broad
adoption of this approach—namely that it “removes a key protection in group
health insurance” that prevents insurers from rejecting members of group plans
for health reasons, as well as enabling all group participants to pay the same
premium.
Workforce Management contributing editor Garry Kranz is based in Richmond, Virginia. E-mail editors@workforce.com to comment.
Reproductions and distribution of the above article are strictly prohibited. To order reprints and/or request permission to use the article in full or partial format, please contact our Reprint Sales Manager at (732) 723-0569.
Comments
Guidelines: Comments that include profanity or personal attacks or other inappropriate comments or material will be removed
from the site. We will take steps to block users who violate any of our posting standards, terms of use or privacy policies
or any other policies governing this site. You are fully responsible for the content you post.