Insurance shifting

Providing health insurance is expensive for companies, yet it is an important tool to attract and keep workers. So companies often get crafty whenever trying to cut these costs. One way to do this is limit insurance coverage for family members. Insurance shifting, as it's known, is the practice of placing the insurance burden onto someone elseā€¦kind of like a game of "hot potato."

Steve Millard, Executive Director of COSE, the Council of Smaller Enterprises, explains how an employer can "shift" the burden of providing insurance:

MILLARD: So they can do that a number of ways. They can simply not make it available to other members of someone's family, they can charge a premium, or not pay as much in support for another dependent's insurance coverage, or they can actually charge a penalty to get access to the current employer's coverage if other coverage is available.

A recent Ohio Employer Health Survey found that this sort of shifting is a trend, and it can leave families more stressed, because they now have more limited or expensive insurance options.

While insurance shifting is happening across the board, small companies are resorting to it more frequently. Health insurers typically base their charges on the health claims of a company's employees the previous year or two. It doesn't take many major illnesses in a small company to send claims soaring; insurers then try to make that up by raising rates. Again, COSE's Steve Millard:

MILLARD: Yeah, it's particularly in the small business marketplace that you'll see this happening because the costs are just so much for small businesses. They're trying to find any way that they can to be fair and provide insurance to their employees, but then also, if someone's got another option, they want them to utilize that that option.

When both spouses or partners work for employers with health insurance, it may not be a big burden to "incentivize" the couple to stick to individual coverage with their separate employers. But when one partner doesn't have coverage at work, or there are children involved, this trend of insurance shifting can wreck a family budget. Nonetheless, experts expect the trend to increase.

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