Large firms that 'self-insure' are resisting new regulations

Oct 23 2009

"Despite promises by President Barack Obama, more than 70 million Americans who have health insurance through their jobs could be open to higher costs or denials of some coverage under a leading overhaul plan making its way through Congress," The Associated Press reports. "That's because large employers that directly assume the cost and risk of health coverage for their workers -- including Wal-Mart Stores, Inc., Caterpillar Inc. and Xerox -- wouldn't be subject to the same rules and restrictions that would be imposed on health insurers in the measure approved this month by the Senate Finance Committee. Large companies that offer their workers such coverage are lobbying hard to keep the status quo and be shielded from costly new regulations and requirements in the final health measure currently being negotiated behind closed doors by Obama's top aides and leading Democrats."

The companies want to be able "to keep extending health insurance to their workers free of many insurance regulations, such as those governing what services must be covered by a policy and when a person can be denied coverage" (Davis, 10/21). 

Meanwhile, "[r]estaurants, retailers and other businesses with high rates of employee turnover are pushing lawmakers to revisit how 'full-time' workers are defined in a healthcare overhaul measure to avoid being slapped with hefty fees for failing to insure their temporary or short-term workforces," CongressDaily reports. "Current versions of healthcare legislation would force large companies to pay a penalty if they choose not to provide health insurance for employees who work more than 30 hours a week." But there is not a definition of how many weeks employees must work to qualify for health insurance. "That omission could be devastating for firms whose employees may work long hours on a single assignment and then go without working for weeks at a time. Among them are professional staffing companies who cater to businesses seeking temporary workers" (Dann, 10/22).