Most employers hope to avoid raising rates for their Group Health plans when new regulations under the Affordable Care Act take effect, according to a nationwide survey of more than 1,200 businesses by Willis Human Capital Practice.
"Employers are still coming to terms with the impact of healthcare reform, and many employers still seem to function in a 'shock mode,'" says Jay Kirschbaum, Practice Leader of the Willis National Legal and Research Group.
The study found that many businesses have not yet calculated the cost of implementing these changes and are relying on perceptions rather than detailed analysis.
For employers reviewing coverage options and compliance details, see Understanding Health Coverage Options Under the ACA for background on common plan choices and trade-offs.
Survey findings
- More than one in three employers might shift health care costs to employees.
- The percentage of employers willing to forego "grandfathered" status for their health plans rose significantly compared with previous years.
- Most employers intend to "play" under the "pay or play" mandate by offering plans that exceed the minimum essential coverage and then adjust coverage and employee contributions later to manage expenses.
The study also concluded that most businesses are either relying on inaccurate "perceptions of cost" in planning their responses to healthcare reform, or don't believe the new rules will affect their Group Health program.
For example, only about one in five surveyed employers planned to adjust other rewards (retirement, dental, vision, salaries, vacation, bonuses, and so forth) to offset the cost of implementing ACA changes; employers reviewing benefit strategy may find ideas in Attracting Leadership Talent Through Competitive Benefits.
If you would like informed, practical advice on bringing your company's plan into compliance while getting the maximum benefit from your health care dollar, please feel free to ask an agent.
Frequently Asked Questions
Will my company have to raise employee contributions because of the ACA?
Not necessarily; employers are using a range of strategies, including plan design changes and shifting some costs to employees, but outcomes vary by employer size and current plan design.
What does "grandfathered" status mean for a health plan?
Grandfathered status means a plan existed before certain ACA rules and has not made significant changes that reduce benefits or raise costs for enrollees, but many employers choose to forgo that status to redesign benefits.
What is the "pay or play" mandate?
The term describes the option for employers to either offer qualifying health coverage to employees ("play") or face potential penalties if they do not ("pay"); how employers respond depends on cost and workforce considerations.
How should employers estimate the true cost of ACA changes?
Employers should run plan-level cost projections, consider workforce demographics, and review total rewards trade-offs rather than relying on general perceptions.