Marketplace has a new podcast for kids, "Million Bazillion!" EPISODE OUT NOW
News In Brief

Companies looking to drop employer-sponsored health insurance?

Lilly Fowler May 6, 2010

CNN has attained internal documents that reveal big companies like AT&T, Deere, and Verizon debated whether to dump “the health care coverage they provide to their workers in exchange for paying penalty fees to the government.”

Is this the unintended consequence of the new health care legislation: companies saving money by opting to pay government penalties, rather than continuing to insure employees?

Although Congress first requested the companies’ documents, at no point did the government reveal that companies were deliberating dropping coverage. But deliberate they did.

At&T, for example, produced a PowerPoint presentation: “Medical Cost Versus No Coverage Penalty.” It found that its health care cost would fall from $2.4 billion a year to $600 million if it stopped providing health insurance to its employees, and paid the penalty instead.

Although companies like Verizon are now denying they’re even contemplating that course of action, records show otherwise. And what would the collapse of employer-sponsored health care mean for health care reform?

Only time will tell, but it’s probably not what President Obama had in mind.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.