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Employers still committed to health benefits

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in Compensation and Benefits,Human Resources

Despite persistent worries that the Affordable Care Act (ACA) will raise costs for employer-provided health insurance, less than 1% of companies responding to a new survey say they plan to stop offering coverage to their employees.

In fact, the International Foundation of Employee Benefit Plans found that employer resolve to continue providing health benefits to all full-time employees has increased since 2012. Then, only 46.2% of employers surveyed said they would definitely still be offering health benefits to all full-time employees in 2015. Now, 74% say they are committed to offering coverage next year.

That doesn’t mean employers aren’t concerned. Forty-one percent say they expect the ACA will wind up increasing their health insurance costs by 5% or more. Much of the burden will shift to employees.

“Employers are taking a variety of actions to mitigate costs and in most cases are sharing the cost impact with their workforce,” said Michael Wilson, the foundation’s CEO.

The survey, conducted in April, found that:

  • 32% of employers plan to increase employees’ out-of-pocket limits
  • 30% will raise employees’ share of premium costs
  • 30% plan to increase in-network deductibles
  • 24% will raise copays or coinsurance rates for primary care
  • 20% will ask employees to pay a higher proportion of dependent-coverage costs
  • 19% will increase participants’ share of prescription drug costs.

The survey found that few large employers have made broad workforce adjustments because of the ACA. However, some smaller employers have taken steps to keep staffing levels under the 50-employee threshold that will trigger the employer mandate starting Jan. 1, 2015:

  • 16% of small employers have trimmed the size of their workforces
  • 11% have reduced hours so fewer employees work full time
  • 10% have cut back on hiring in order to keep payrolls under 50 employees.

In addition, 11% have frozen or reduced pay raises and other compensation to help cover higher health insurance costs.

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