Employers Consider Dropping Health Benefits In Exchange For Penalties
May 6, 2010
US (ChattahBox) – In a profit versus employee matter, documents on various companies have been released that show that AT&T, Verizon, and other corporate giants are weighing in on whether or not they will provide benefits to those that work for them, or just pay the penalties to the government.
The documents show columns showing the burden of cost for covering all employees and retirees versus the cost of taking the penalties and paying directly to the government, a foreseen consequence that many hoped the corporations wouldn’t be so heartless as to take.
One document from AT&T and released by CNN showed the cost of coverage at $4.7 billion, while the cost of penalties would be $.6 billion.
However, Representative Henry Waxman (D-Cali) has accused these companies of over-exaggerating the cost of coverage as a financial burden as a ploy, and has demanded that the CEO’s attend a hearing where confidential memos on the topic will be viewed and discussed in front of the House Energy and Commerce Committee, of which he chairs.
The hearing was canceled after 1,100 documents were received, which were surprisingly supportive of the new health care bill despite this possible attempt to navigate away from paying for health benefits.
The question now seems to be whether or not those employees will really be dropped, or the positives that would be provided for the companies issuing benefits will be enough to keep them in line.
If the coverage is dropped on a wide scale, the burden to the government could increase by over $150 billion in the first five years.
Will this fact force higher penalties for companies that drop coverage?