The insurance intended to claim or use in order to cover the medical expense incurred for the treatment of diseases among the individuals is called as health insurance. The individuals who work with government firms or private sector are usually availing the facility of health insurances. The employer can pay the insurance premiums on behalf of their employees. However some of the employers can collect the premium from the employers. According to annual survey, the annual premiums sponsored by the employer towards payment in order to cover the health coverage for the employee and their family have reached to $16,834 in 2014 (Gary, Matthew, Nirmita & Anthony, 2014). The expenses to be paid by the insurer are expecting to be increased day by day toward payment of medical bills. Therefore the insurance companies who are offering the health insurances policies are increasing the premiums and the renewals. By considering these facts, the employers are rethinking in the benefits to be provided to their employees. The health insurances offering by the employer or insurance companies have advantages and disadvantages.
The present paper describes the advantages and disadvantages of termination of health insurance coverage and moving the employees to the health insurance exchange.
Across the world, most people and their family members are getting benefitted form the health insurance through their employer and the health insurance are called as ‘group health insurance’. Varity of insurance policies are available in the market to cater the health needs in general and for the treatment of specific diseases in particular (NCCS, 2012). The insurances include comprehensive health coverage (cover all medical expenses including prescription drugs); fee-for-service (pay a portion of bill); managed care policies (care can be provided from the network of participating providers). The insurances can be long term renewable and short term renewable or non-renewable type policies. The plan depends on the employee and employer. In the present case, the employer wanted to terminate the health insurance plan and move the employees to the health insurance exchange in order to avail the purchase of healthcare plans. The probable causes for changing the policy are (i) to minimize the expenses towards premium to be paid for insurance providers and/or (ii) increase the cost of premiums. Similarly, a company (The International Business Machines Corporation, IBM) was terminated the policy for Medicare eligible retirees due to increase in the projected cost. IBM was exchanged the policy to Extend Health so that the employees can choose the policies as per their requirement (Tyler, 2013). The decision of changing the policy would create competition among the employers and reduces the cost. However the employers who are changing the policies for the wealth of organization would show some potential impacts on employees and employers. The new decision of employer can pose advantages and disadvantages as described below.
The advantages and disadvantages of termination of health insurance and switching to other plans are discussed.
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