The Patient Protection and Affordable Care Act is having little effect on workforce strategies, employer survey data shows. More than two-thirds of employers say they will continue to provide healthcare coverage when health insurance exchanges begin operation in 2014.
Despite ominous predictions that employers would drop healthcare coverage en masse in response to the strictures of the healthcare reform law that has not come to pass.
Instead, employers are largely are planning to keep offering health plans to their workers and the Patient Protection and Affordable Care Act is having little effect on workforce strategies, employer survey data shows.
Still, look for employees to continue to pay a larger portion of their healthcare premiums as well as the medical care they receive.
More than two-thirds of employers (69%) say they will continue to provide healthcare coverage when health insurance exchanges begin operation in 2014. That's up from 46% in 2012 according to the 2013 Employer-Sponsored Health Care: ACA's Impact (PDF), a survey by theInternationalFoundation of Employee Benefit Plans.
Meanwhile, only 2% of employers are considering terminating their healthcare coverage as a result of the healthcare reform law, the survey reports.
It also provides some relief from consistent concerns that the PPACA will contribute to higher unemployment. Few organizations report that they are changing their workforce hiring or reduction strategies as a result of healthcare reform. Only 16% have adjusted or plan to adjust hours so fewer employees qualify as full-time.
The IFEBP survey results demonstrate that employers have developed some level of comfort with the healthcare reform law. In the 2012 survey, 31% of respondents were still taking a "wait and see" approach to the PPACA. By 2013 only 10% were still sitting on the fence.
In a telephone interview, Julie Stich, research director for the Milwaukee-based International Foundation of Employee Benefit Plans, credited the Supreme Court decision affirming the healthcare law and the end of the election season with putting employers in a "move on" frame of mind. "There's more certainty now among employers regarding how employee healthcare coverage will be affected," she adds.
Employers are now taking a more proactive approach to incorporate PPACA rules and regulations into their business models. The actions most frequently mentioned by survey respondents:
- Developing tactics to deal with the implications of healthcare reform (52%)
- implementing changes to make their health plans compliant (39%)
- Developing multiyear approaches to reform (38%)
- Modeling the financial impact of the ACA on their organization (37%)
Cost containment is critical as "employers across the country… deal with the impact of implementing the PPACA while still being able to provide competitive benefits for their employees," says Stich.
More employers are planning to make changes in 2014 to their current benefit plans that will affect employees and plan participants as a result of current and upcoming PPACA regulations:
- Almost one in five employers (18%) has already increased the participant share of plan premiums and 25% expect to take that step in 2014.
- Some 14% have increased in-network deductibles and 18% will take that step next year.
- Only 10% have already taken the step of increasing the employee contribution to dependent coverage costs but 24% expect to jump on that bandwagon in 2014.
- Some 14% have already increased out-of-pocket costs and 18% will take that step next year.
One surprise, says Stich, is that employers are already taking steps to avoid the nondeductible excise tax on their high-cost health plans, which are defined as healthcare premiums that exceed $10,200 for single coverage, or $27,500 for family coverage. The tax goes into effect in 2018, but 17% have already begun redesigning their primary health plan to avoid the tax and 40% are considering action.
Among other findings:
- Some 25% are increasing their emphasis on high-deductible health plans with health savings accounts (HSAs,) while 14% are assessing the feasibility of adding a plan.
- Almost one-third of respondents (31%) named extending coverage of adult children to age 26 as the ACA provision producing the most significant cost increase.
- One quarter of respondents (25%) plan to expand the use of financial incentives to encourage healthier lifestyles in the next year.
The online survey was conducted in March 2013. The 966 respondents include benefit and human resources professionals as well as financial managers.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
