Health Insurance Rates Make Early Retirement Appealing #CrewChange

Unforeseen Crew Change

In an article written by The Motley Fool a study by the (CBO) Congressional Budget Office which I will include here projects “a drop in hours worked equivalent to having 2 million fewer full-time workers in the workplace in 2017.”

“You may be eligible for deeply discounted health insurance
Insurance premiums for older men and women are expected to drop by 19% and 32%, respectively, under the Affordable Care Act, according to a recent study. This will decrease the amount of out-of-pocket premium dollars this population will need to spend on health insurance, meaning they will need less money to cover health expenditures.”-Motley Fool 

Don’t gloss over the study.. 

The CBO study says ” Because the supply of labor is responsive to changes in compensation, the employer penalty will ultimately induce some workers to supply less labor.”   What this basically means is that as costs for employers go up, they will pass these on to their labor force by increasing the burden on labor.

The combination of cheaper health insurance if you are unemployed and burden on the labor if you are employed increases the opportunity  for retirement age workers to leave early or as planned.  The Affordable Care Act itself is an enabler for crew change.

There was a time not long ago.. when retired workers would take jobs just for health insurance.   They don’t have to do that anymore either.  It actually may be more expensive for them to take a job just to get health care as opposed to going to the government.   What impact will this have on the system relative to jobs older workers would normally take (Walmart Greeter)?

The study tells us that the demand for labor will increase and that the supply will decrease starting in 2015 except in the case where ”

employers of 50 or more full-time equivalent workers that do not offer health insurance (or that offer health insurance that does not meet certain criteria) will generally pay a penalty. That penalty will initially reduce employers’ demand for labor and thereby tend to lower employment.”

Double Whammy!

What do you think?  How will this impact your business in the next year or so?  Are you ready for your older workers to leave early?  I have heard that it is happening already..