Most employers are not considering canceling health benefits as a result of the year-old health care reform law, according to two recent surveys. The Affordable Care Act (ACA) may be politically unpopular, but employers assume that it will be a business fact of life for the foreseeable future.
Health benefits still key
“Health insurance remains a recruiting and retention tool,” said Amy Bergner, an attorney and health policy expert with the benefits consulting firm Mercer.
Speaking earlier this spring at the Society for Human Resource Management’s Employment Law and Legislative Conference, Bergner said maintaining health benefits is, for now, a business imperative for most employers.
“The fact of the matter is, if you drop health insurance, you will probably have to pay your employees more. That could knock out any savings gained by discontinuing coverage,” she said.
Employers seem to agree. A survey of more than 1,000 companies conducted by the International Foundation ofrevealed that 87% of employers said they were planning to continue offering health benefits. Reason: They are a key recruitment tool.
Twenty percent of employers said they extended health benefits to employees’ adult children before they were statutorily required to do so (i.e., for plan years beginning on or after Sept. 23, 2010), and 75% said that extending coverage impacted their costs.
Other survey results include the following:
- 42% of employers also extended dental coverage to employees’ adult children; 32% extended vision coverage.
- 21% of employers added or increased the visibility of high-deductible health plans, and 70% of those employers linked those health plans to tax-advantaged health savings accounts.
- 66% of employers will take advantage of the health care reform law’s increase in wellness incentives—to 30% of the total cost of coverage (i.e., employer and employee contributions), up from 20%.
No ax to nonmedical benefits
Forty-three percent of employers that participated in a MetLife survey responded that in the wake of the health care reform law, nonmedical benefits—disability insurance, life insurance and dental insurance—remain important elements in their overall corporate strategy.
Among the MetLife survey’s findings:
- Only 10% of employers with fewer than 500 employees are planning to reduce spending on nonmedical benefits. The percentage increases to 20% for employers with 500 or more employees.
- 45% of employers with fewer than 50 employees have yet to decide whether to make changes in plan design. The percentage dropped to 18% for employers with more than 500 employees.
- Of employers considering increases in employees’ cost-sharing, 24% have fewer than 50 employees; 28% have between 50 and 500 employees.
Few consequential health care reform rules go into effect in 2011. Bergner urged benefits professionals to spend the rest of the year assessing current health benefits and current and future needs.
Her to-do list for HR pros this year:
- Assess your current health insurance plan, who it covers and how much it costs.
- Get your broker’s help to project your insurance needs for 2012 to 2014. Factors to consider: Your organization’s projected staffing, premium increases you can anticipate and your recent claims history.
Engage seniornow. HR alone can’t make all the health benefits decisions that will affect your business in the next two years. “A lot of you are probably getting more C-Suite interest in benefits than ever before,” Bergner noted. “You’re going to need their support as you move forward.”
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