Zeke Emanuel: Employer-based insurance will die out by 2025

Workers will shift into the insurance exchanges, Emanuel argues

In his latest book, Ezekiel Emanuel predicts that "fewer than 20% of workers in the private sector will receive traditional employer-sponsored health coverage" by 2025.

Emanuel helped craft the Affordable Care Act (ACA) while serving as health policy adviser to President Obama. His book, "Reinventing American Health Care," offers a "full-throated defense" of the law, according to the New York Times.

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Addressing employer-based insurance, Emanuel wrote that "a few big, blue-chip companies will announce their intention to stop providing health insurance. Instead, they will raise salaries substantially or offer large, defined contributions to their workers. Then the floodgates will open."

Meanwhile, he predicts that few small businesses will participate in the ACA's small-business exchange. Rather, he argues that small employers are more likely than big employers to drop coverage altogether, especially since the employer mandate does not apply to companies with fewer than 50 workers.

But Emanuel argues that the change isn't necessarily problematic. Although it could mean that employees lose the tax breaks associated with employer-based coverage, insurance marketplaces with strong options could present a viable alternative.

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In an interview with the New York Times, Emanuel argues that employer-based insurance is so popular because it's a strong incentive for workers with no strong alternative in the individual market. The insurance exchanges created by the ACA could change this and push some employers to say, "It's better for my employees to drop coverage. They have freedom to decide how much they want to spend on health care…"

Some employers, however, will opt to keep the coverage because they consider health care to be a critical way to care for and compensate workers.

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In a subsequent Times interview, Emanuel acknowledged that the exchanges would need to improve to make his prediction a reality. 

The fate of the employer mandate

Meanwhile, longtime Obama advisor Robert Gibbs—who once served as the administration's press secretary—last week predicted that the employer mandate would never be implemented. The mandate has already been delayed twice.

"I don't think the employer mandate will go into effect. It's a small part of the law. I think it will be one of the first things to go," he said at the 2014 Benefits Selling Expo.

But Emanuel argues that Gibbs is "wrong. Period." He says that the mandate is the "right thing to do" (Mandelbaum, "You're the Boss," New York Times, 3/26; Mandelbaum, "You're the Boss," New York Times, 4/7; Mayer, Benefits Pro, 4/2).

How the ACA is affecting employers

Employers across the country are making adjustments and plans as the ACA rolls out. Here's a look at what some employers are saying:


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