May 17, 2013
Health insurance in the workplace won’t go away because of the Patient Protection and Affordable Care Act. But it will be different.
That’s the latest word from roughly 1,000 employers surveyed by the International Foundation of Employee Benefit Plans. Though the new report found that employers are concerned about cost increases to health benefits next year as a result of reform, virtually all employers intend to keep their coverage for full-time workers.
The majority of employers (69 percent) say they will “definitely” continue to provide employer-sponsored health care when health exchanges come online in 2014 — a 23 point increase from 2012.
Another quarter of respondents (25 percent) said they are “very likely” to continue their employer-sponsored coverage. The findings are a follow-up from preliminary results of the study released last month.
Opponents of President Obama’s PPACA have argued that employers will drop health coverage as an unintended consequence of the law that will negatively affect employees who want to stick with the coverage they know and like.
Estimates have varied widely on just what reform will do to employer-sponsored insurance, with some reports projecting 10-30 percent of employers will drop coverage. But more recent analyses — including from consulting firms Aon Hewitt and Towers Watson — suggested that figures are overblown.
In good news for brokers selling the plans, and employees who depend on them, fewer than 3 percent of companies surveyed reported they were at least somewhat unlikely to continue coverage of full-time employees.
‘More changes on the horizon’More than nine in 10 employers said they are past the “wait and see” stage of planning, and 52 percent have begun to institute changes in their benefits, according to the survey.
And their commitment to keep providing health care coverage comes despite the fact that they believe reform is increasing their costs.
Most employers (88 percent) already have seen cost increase because of provisions like the requirement that young adults can remain covered on their parents’ plans until they turn 26.
Health reform’s requirement that companies with at least 50 employees provide affordable health benefits is the primary reason most companies expect their spending on health insurance to rise in 2014. They also believe that additional rules coming next year will further their spending.
As far as the cost impact, 47 percent estimate their 2013 cost increases — directly due to PPACA — to be less than 5 percent, while 41 percent estimate it to be more than 5 percent.
Nearly one in five employers has already increased participants’ share of plan premiums and an additional quarter of respondents plan to increase the portion that employees pay for their premiums over the next year, the survey found.
Of those employers already planning to make changes, 24 percent are increasing their emphasis on high-deductible health plans with health savings accounts, while an additional 14 percent are assessing the feasibility of adding one.
Then there’s the encouragement of healthy behaviors in employees, with 19 percent of employers developing or expanding organized wellness programs within the last year. Another 14 percent of employers adopted or expanded the use of financial incentives to encourage healthier lifestyles within the past year, with another 25 percent planning to do so in the next year.
“We are seeing trends that indicate more changes may be on the horizon,” Julie Stich, research director for the IFEBP, said in a statement.
Some of those big upcoming changes include more organizations losing grandfathered status, and others redesigning their plans to avoid the 2018 excise tax on so-called Cadillac plans.
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