Eliminating Health Coverage Could Mean Backlash

Companies that opt out of healthcare might not even save money.

Maggie Wilderotter, chief executive officer at cable, Internet and phone provider Frontier Communications Corp. says it’s her “fiduciary responsibility” to study ending medical benefits long provided by her company.

“Frontier, like a lot of companies, is likely to at least consider dropping health-care benefits” in 2014, she said.

Future Decisions

It’s still early and any changes that occur are probably a ways off. Frontier CEO Wilderotter commented about possibly dropping health-care benefits in response to a question from an employee at a meeting Nov. 6 about the company’s third-quarter performance. The telecommunications company hasn’t yet analyzed the pros and cons of dropping health care and “nothing will change in 2013,” she told employees at the meeting Frontier’s Stamford, Connecticut headquarters. The company employs about 15,000.

Paying More

For a low-wage fast-food worker, the exchange approach might offer a better deal, said Abbott of Towers Watson. Those who make too much for subsidies -- from office workers to senior managers -- would end up paying more, said Mercer’s Watts. A typical family may spend $2,000 a month on the exchange compared with the $300 to $400 a month they average now for their share of premiums in a company plan, Mercer estimates.

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