Caterpillar Inc. has discussed the possibility of dropping the health care coverage of its active employees because paying the federal penalty for doing so might be more cost effective.
That information was contained in an internal memo last fall when the company's Human Services Division was looking at various options to deal with then-pending health care reform legislation that has since become law.
That memo spelled out that Caterpillar could save money by paying the per-employee penalty compared to what it now spends on average for health care coverage. The memo, dated Nov. 9, said the penalty Caterpillar would pay would be far less than the amount it spends each year to provide health care coverage.
"Our current health care spend for active employees is approximately $305 million so we would need to give serious consideration to this option," Jerry Duggan, from the Human Services Division, said in the memo to other company officials.
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