The new employer mandate penalties are a lot lower than what we are spending now for medical benefits. How should I respond to senior management that is asking “Shouldn we just exit this business”?
A110. It is unlikely that an employer could simply terminate medical coverage and pay the (lower) penalty without damaging its competitive standing for labor, because these benefits are a significant part of your total compensation package. Instead, you will need to re-evaluate your mix of compensation and benefits to maximize the return of each dollar spent.
