Employers Seen Ending Health Coverage If Suits OK'd

By Marco, Donna De | The Washington Times (Washington, DC), January 21, 2000 | Go to article overview

Employers Seen Ending Health Coverage If Suits OK'd


Marco, Donna De, The Washington Times (Washington, DC)


Many employers say they would eliminate health care benefits for their workers if Congress passes a law that allows patients to sue their managed care plans.

More than a third of the employers who responded to a survey by Hewitt Associates, a global management-consulting firm, said they probably would get rid of coverage if new legislation makes managed care plans liable. Employers providing health insurance fear that legislation could expand health care-related lawsuits to them.

"There's a lot of litigation in the United States now," said Frank McArdle, principal and manager of Hewitt's Washington research office. Companies don't relish additional litigation, he said.

Employers do not want to take the risk of continuing to offer health benefits if Congress passes a law that would give employees the right to sue health maintenance organizations (HMOs). Their costs would increase significantly and employers would be faced with unpredictable lawsuits that could result in large sums of money being awarded to workers.

"It all boils down to cost," said Paul Fronstin, senior research associate at the D.C.-based Employee Benefit Research Institute. "But there's no way to know and employers don't want to take the risk."

Health coverage is the most important benefit for a worker, Mr. Fronstin said. Last year, the House passed managed care reform legislation that included giving patients the power to sue their HMOs. The Senate version did not include that provision. A Senate-House conference committee is trying to work out a compromise bill.

"A lot hinges on the exact wording and how exposed employers will be within that wording," Mr. McArdle said.

Julia Bellinger, a lobbyist for the Society for Human Resource Management, said she is not surprised by the survey's results.

"Liability for employers is such a big thing," she said. "If employers are held liable, they would want to get out."

According to the Hewitt survey, released this week, 95 percent of the 600 large companies surveyed said their health care benefits are used for attracting and retaining employees.

Just about every large employer and more than half of the businesses with less than 200 employees offer health care benefits. …

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