The majority of employers seek to avoid cost increases for their group health plans. However, more than half have not put pen to paper to calculate the cost of healthcare reform, according to a survey by the Willis Human Capital Practice, a unit of Willis Group Holdings.
Among employers who have tracked the cost of compliance, nearly two-thirds indicate that healthcare reform has increased their costs, Willis said. While 60 percent of employers state that avoiding healthcare reform cost increases is very important to their businesses, employers are relying upon inaccurate “perceptions of cost” as they plan their responses to healthcare reform, Willis said.
When asked about the impact of healthcare reform on various aspects of plan design and benefits offered to employees, the majority of employers said that healthcare reform has not yet affected their plans.
Perhaps because many employers assume that healthcare reform will generally not affect their costs, only 20 percent of surveyed employers plan to adjust other rewards (i.e., retirement, dental, vision, salaries, vacation, bonuses) to offset the cost of compliance. The majority of employers hope to comply with healthcare reform and expand health coverage as necessary — without reducing other benefits.
The Health Care Reform Survey 2013 outlines employers’ perceptions regarding the Patient Protection and Affordable Care Act (PPACA) and their planned responses to health care reform measures. The survey provides a snapshot about what actions employers believe other employers will take in response to healthcare reform and represents the findings from more than 1,200 employers of varying sizes, industry sectors and geographic regions.
Other findings include: 55 percent of employers felt that competitors would shift costs to employees; 34 percent indicated that they might take this same action.
Employers indicated that they are now much more likely to voluntarily relinquish grandfathered status (this year 39 percent of employers chose to voluntarily forego grandfathered status; last year, only 13 percent of employers made the same decision).
Most employers intend to “play” under the “pay or play” mandate, and are planning to offer coverage that exceeds the “minimum essential coverage” requirement, and then adjust coverage and contributions after the fact to manage expenses.
“Employers are still coming to terms with the impact of healthcare reform, and many employers still seem to function in a ‘shock mode.’ While few employers consciously manage their group medical benefits as a component of their total rewards perspective, survey responses indicate the very beginning of an employer trend in this direction,” said Jay Kirschbaum, practice leader – National Legal and Research Group, Willis Human Capital Practice.
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