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New Survey Examines Employer Reactions to Health Care Reform One Year Later

BROOKFIELD, Wis., June 8, 2011 (GLOBE NEWSWIRE) -- In the year since health care reform became law, a new survey finds that employers across the U.S. are maintaining their health care benefits, implementing cost-sharing methods and assessing the long-term impact of reform on their organizations. Health Care Reform: Employer Actions One Year Later, released by the International Foundation of Employee Benefit Plans uncovers actions employers have taken in the last 12 months and explores their plans for the upcoming year. It is the second in a series of surveys on the impact of the Patient Protection and Affordable Care Act (PPACA) on single employer plans.

"For the most part, employers have moved beyond the 'wait and see' phase they were in just a year ago and are beginning to take action," explained Sally Natchek, Senior Director, Research at the International Foundation. "Although many employers are concerned about rising costs, very few have drastically altered or ended their health care benefits. Most employers remain committed to offering quality health care benefits to their employees."

Employers Anticipate Rising Costs – Many Plan To Increase Employee Cost-Sharing

A majority of employers (60%) have conducted an analysis to determine how health care reform will impact their 2011 plan costs. Among respondents analyzing cost impacts, the largest proportion (36%) estimates health care reform legislation will increase their health care costs in 2011 by 1%-2%. Although extending coverage to adult children to age 26 is still seen as the top driver of cost increases, administrative costs and cost-shifting due to reduced Medicare and Medicaid payments to providers have emerged over the past year as major concerns.

To help ease the increased costs brought on by health care reform, 40% of employers are increasing employees' share of premium costs, 29% are raising in-network deductibles and 28% are increasing employees' proportion of dependent coverage cost. Many employers also plan to increase out-of-pocket limits and copayments or coinsurance for primary care (27% and 24% respectively).

Employers Maintain Health Plan Benefits – Extend Dependent Eligibly for Other Benefit Offerings

Although many employers are looking to employees to help manage rising costs, very few plan to eliminate or reduce their health plan benefits as the result of health care reform. Just 2.6% plan to cut health benefits for new hires, 1.6% plan to drop dependent coverage, 0.9% will close health benefits to new hires and 0.8% will discontinue health benefits for active workers or retirees. Less than one percent of employers (0.7%) plan to stop providing employees with health care coverage in 2014, when "play or pay" provisions become effective.

Additionally, although required only to extend health care benefits to dependents until age 26, 60% of employers are going a step further and changing the eligibility requirements for dependents in other benefit plans (e.g., dental, vision, etc.) to conform to the requirements of their medical plans.

Few Organizations Anticipate Maintaining Their Grandfathered Status

Even though employers report several benefits of maintaining their grandfathered status—namely that their plans are exempt from the appeals process and the requirement to provide coverage for preventive care with no cost sharing or annual limits—just 30% expect to maintain grandfathered status beyond the next three years.

"Maintaining grandfathered status will be very challenging for employers," stated Natchek. "Plans can lose the status in numerous ways including reducing benefits, raising coinsurance or significantly raising copayments or deductibles. To remain grandfathered, an employer will be able to make only limited changes in their health care plan. This does not appear feasible for most organizations."

Wellness and Related Programs on the Rise

Because of health care reform, nearly one in five employers has adopted or expanded their use of wellness initiatives in the last 12 months (18%), and more than one-quarter (27%) plan to do so in the next 12 months. Additionally, 38% are expanding the use of financial incentives to encourage healthy behaviors, and 27% are adopting or expanding their disease management offerings.

High-Deductible Plan Interest Remains among Employers

Employers continue to perceive value in the role of high-deductible health plans (HDHPs) for cost management. As a result of health care reform, approximately one-third of responding organizations (33%) are increasing their emphasis on or assessing the feasibility of HDHPs with a health savings account (HSA). Rarely are employers reducing their emphasis or assessing the feasibility of dropping HDHPs.

About The Survey

Survey responses were received from 1,350 individuals including benefits and human resources professionals, general and financial managers, and other professionals. Those asked to participate in the survey were members of the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialist (ISCEBS).

Health Care Reform: Employer Actions One Year Later —Survey Results May 2011 is the second in a series of reports on the impact of health care reform legislation on benefit plans. It is available free to International Foundation members. Non-members can purchase the e-book for $50. Visit www.ifebp.org/books.asp?7051E.

The International Foundation of Employee Benefit Plans is a non-profit organization, dedicated to being a leading objective and independent global source of employee benefits, compensation, and financial literacy education and information. For additional information, visit www.ifebp.org.

Contact:
Brenda Rood
Public Relations Associate
International Foundation of Employee Benefit Plans
18700 W. Bluemound Road
Brookfield, WI 53045
(262) 373-7756 | (262) 786-8670 Fax
brendar@ifebp.org | www.ifebp.org

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http://www.cisionwire.com/international-foundation-of-employee-benefit-plans/r/new-survey-examines-employer-reactions-to-health-care-reform-one-year-later,c9132823

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