Benefits

Majority of Employers Hope to Avoid Health Care Reform Compliance Costs: Survey

By Max Mihelich

Feb. 15, 2013

After the U.S. Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act in July and with President Barack Obama elected to a second term in November, businesses are finally coming to grips with compliance of the law, according to a survey release by Willis Human Capital Practice, a unit of Willis Group Holdings.

The survey, which was released Feb. 14, states most employers are hoping to avoid cost increases to their group health plans brought on by health care reform, but more than half have not calculated those expected increases yet. However, nearly two-thirds of responding employers that have calculated the costs of health care reform said the new law has led to increases.

Sixty percent of employers said avoiding cost increases is very important to their business. But when asked about aspects like plan design and benefits offerings, the majority of employers said health care reform has not affected their plans, according to the survey. And only 20 percent of respondents indicated they expect to adjust dental plans and salaries and bonuses, among others, to offset the cost of compliance with the law.

“The survey suggests that employers continue to recognize the value of providing medical benefits, how important those benefits are to their employees, and that providing benefits allows them to attract and retain the employees they need,” Willis’ National Legal and Research Group Practice Leader Jay Kirschbaum said in a statement. “Therefore, they generally plan to continue offering competitive medical benefits. However, they are considering several potential options, even including the possibility of coverage through state exchanges.”

Other key findings from the survey include:

• 55 percent of employers felt that competitors would shift costs to employees; however, only 34 percent of employers indicated that they might take this same action.

• Employers indicated that they are now much more likely to voluntarily relinquish grandfathered status (in fact, 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 predominantly planning to offer coverage that exceeds the “minimum essential coverage” requirement, and then adjust coverage and contributions after the fact in order to manage expenses.

The entire survey can be read here.

Max Mihelich is Workforce’s editorial intern. Comment below or email editors@workforce.com

Max Mihelich is a writer in the Chicago area.

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