With more and more employers dropping their health plans for their employees, consumers will have to turn to government plans or individual health insurance plans to meet their coverage needs.  According to the article “Many Employers Likely to Drop Health Plans in 2014″ by Rick Lindquist on ZaneBenefits.com, many more employers will be cancelling their plans by 2014 when health care reform goes into full effect.

The new health care bill requires employers with over 50 employees to pay a $2000 penalty per employee if they choose to cancel health coverage after 2014.  Since this penalty is much cheaper than actually providing benefits for their employees, more employers than ever are expected to cancel.

According to the National Survey of Employer-Sponsored Health Plans by Mercer, which looked at 2800 employers, 20% of companies with 10-499 employees plan on cancelling their health plans in 2014 and 6% of large companies with over 500 employees plan to do the same.  It’s quite possible that most small employers with less than 50 employees cancel their health plans because they face no penalty if they do not offer benefits.