Thursday, September 27, 2012

First Roebuck, and Now Health Insurance [UPDATED]

Some time ago, can't say exactly when, the Roebuck name was dropped from the Sears and Roebuck brand. I am pretty sure Alvah Roebuck was dead so there was no objection from him.

Now it appears the folks at Sears will be dropping group health insurance for their employees.

Sears Holdings Corp. plans to to fundamentally change the way it provides health insurance,  opting to give its workers a fixed sum on money to purchase their own coverage from an online marketplace instead of having them participate in a company-provided plan.

Chicago Tribune, "Sears to overhaul health insurance"

Fundamentally change. Has a nice ring to it, doesn't it? Somehow it sounds familiar . . .

And this comes right before the fall election. Do you suppose this had anything to do with Obamacare?

Wonder how the Sears employees feel about this move?


And this from the WSJ.

The approach will be closely watched by firms around the U.S. If it eventually takes hold widely, it might parallel the transition from company-provided pensions to 401(k) retirement-savings plans controlled by workers and funded partly by employer contributions. For employees, the concern will be that they could end up more directly exposed to the upward march of health costs.
"It's a fundamental change…the employer is saying, 'Here's a pot of money, go shop,' " said Paul Fronstin, director of health research at the Employee Benefit Research Institute, a nonprofit. The worry for employees is that "the money may not be sufficient and it may not keep up with premium inflation."
WSJ, "Big firms overhaul health coverage"

Fundamental change . . . there's that word again.

We have noted before the demise of the defined benefit pension plan following the enactment of ERISA. We agree with the assertion that Obamacare will have a similar impact on employer sponsored health insurance, but the decline will be much steeper and more rapid.
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