Majority of employers will continue to offer health benefits after ACA enacted

Majority of employers will continue to offer health benefits after ACA enacted

December 05, 2011 | Chris Anderson, Senior Editor

NEW YORK – More than half of all employers said they will continue to offer employer-sponsored health benefits after health reform is fully enacted according to the results of a survey of benefits decisions makers released by GfK Custom Research North America.

Even with many of the details of health reform uncertain, 56 percent of major employers surveyed indicated they would continue to offer health benefits compared with 12 percent who said they would be either very or somewhat likely to drop employee coverage. Thirty-two percent of the 502 private-sector employers surveyed were unsure what they would do once health reform is fully enacted.

"This survey suggests that firms aren’t considering a wholesale flight from employee healthcare coverage as healthcare reform is implemented," said Tim Nanneman, vice president and director of health insurance research at GfK, in a press release announcing the survey results. "However, many employers are skeptical about the potential effects of healthcare reform."

While health reform won’t cause a massive shift in itself, the survey may show what has been a continuing downward trend of employers offering health coverage. According to a recent survey from the Health Research and Education Trust (HRET) and the Kaiser Family Foundation, nearly 60 percent of employers offered employees a health plan, a number that has steadily declined since 2004 when these benefits were offered by 68 percent of employers.

In that same time frame, insurance premiums rose more than 50 percent to $15,073 for family coverage, up from $9,950 in 2004.

The GfK survey also revealed two specific factors that would make it less likely for an employer to consider dropping employer-sponsored healthcare benefits: size of the company and familiarity with the health reform law. Only four percent of employers with more than 500 employees would consider dropping the benefits and only 7 percent of decision-makers familiar with the law would consider dropping coverage compared to 15 percent of those unfamiliar with health reform.

According to the HRET/Kaiser study, the smaller the company, the less likely it would be to offer health benefits and among smaller employers with 3 to 199 employees, 55 percent of those that don’t offer health benefits cited their high cost as the number one reason for not offering them.

Yet despite what appears to be a trend of employers holding firm with their health benefits, most employers are skeptical about health reform’s ability to slow the rate of cost increases and many feel it will actually make the cost trend worse.

Only 11 percent of those surveyed believed the Affordable Care Act would slow the rate of healthcare cost increases and more than half (51 percent) believe health reform will cause costs to increase more rapidly.

The survey also revealed that those employers that have seen the greatest recent cost increases have a lower level of support for health reform. Thirty percent indicated they have seen costs for their businesses increase more than 9 percent annually over the past three years and this group has the most negative attitudes about health reform.

"So it seems that, while the social contract between employers and employees remains secure for the time being, there are signs that it is weakening among some employers. This suggests that as health insurance exchanges become operational, for example, some employers will be receptive to having their employees get insurance via this new option rather than with traditional employer-sponsored insurance," said Nanneman.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

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