Approaches Employers are Taking from the Health Care Reform Regulations

The 2013 Employer-Sponsored Health Care: ACA’s Impact survey results were recently released. The survey was conducted by the International Foundation of Employee Benefit Plans which received responses from over 966 human resources and benefit professionals. The survey’s key findings highlight the methods organizations are using to prepare for Affordable Care Act regulations.

Organizational Approaches to Health Care Reform Regulations

As time is winding down, employers are beginning to realize and accept that the ACA is here to stay.

• Over 90 percent of employers have moved beyond the “wait and see” approach regarding implications from the ACA.
• More than half of respondents or 69 percent, say they plan to continue providing coverage when exchanges open in 2014.
• The same percentage (69 percent) of employers rate their understanding of the ACA as good but not excellent.

Cost Impact

• Around two-thirds or 64 percent, have analyzed the ACA’s cost impact.
• These organizations estimate their costs will increase around 3 – 4 percent or greater.
• Employers have or plan to implement diverse cost-management initiatives in the next 12 months due to the ACA.
  • 43 percent are increasing participants share of premium costs
  • 34 percent are increasing the employee portion of dependent coverage costs
  • 33 percent are increasing in-network deductibles
  • 31 percent are increasing out-of-pocket limits
• Few organizations intend to cut costs by dropping spousal coverage or structuring premiums based on income.

Continuing Coverage

Everyone’s “number one” question is whether organizations will continue to provide coverage. Results from the survey show that:

• A high majority, 94 percent of organizations will definitely continue providing coverage to retain and attract talented employees when the exchanges open in 2014.
• Among the 1 percent that do not intend to provide coverage, two-thirds say they will provide a financial subsidy.

Workforce Adjustments

Employees are concerned that employers could reduce their workforce to comply with ACA regulations. However, few organizations are making workforce adjustments within their staff.

• Only 16 percent of employers are adjusting hours so fewer workers qualify as full-time.

Plan Design Changes

• Roughly 10 percent of employer-based plans have changed their funding approach, which mostly involves the addition of stop-loss insurance.
• A large portion of employers are moving to the approach of offering a high-deductible health plan (HDHP) with a health savings account.
• Among the different options available to alter an employer’s plan design, the majority of employers recognized a need for adopting/expanding their wellness initiatives (19.3 percent).