Health Insurance Costs and Reform Uncertainty Challenge Employers

Lusk says that 48% of the 330 respondents to the online survey said they were taking a "wait and see" approach, and apparently had no plans make changes in their coverage.

Of the companies planning changes, 17% said they might drop employer-sponsored coverage for full-time employees and pay the penalties, 37% plan to maintain their grandfathered health plans as long as possible, and 23% are considering reducing the hours for part-time employees below the threshold to avoid mandatory health coverage.

The survey also found that:

• 85% of respondents believe their benefits costs per employee will increase over the next five years because of the PPACA.
• 68% of employers plan to reevaluate their benefits strategy because of the PPACA.
• 70% are considering expanding wellness programs to help manage healthcare costs.

With so much uncertainty and potential cost at play, Lusk says companies might reexamine their traditional role in providing healthcare coverage. However, dropping healthcare benefits and sending employees out to find their own care on government-sponsored health exchanges presents its own sets of risks and reward, and depends heavily on the type of business. "Companies would make decisions around how transferable the skills are and how easily somebody is replaced," Lusk says.

Some employers would feel that dropping healthcare coverage would put them at a significant disadvantage with competitors for recruiting talent. However, Lusk says money saved from cutting healthcare coverage could be used to provide other incentives that employees might actually prefer.