Facing higher costs and stiff penalties under the Affordable Care Act (ACA) for failing to provide workers with Group Health coverage, the overwhelming majority of employers intend to keep sponsoring these plans, while many businesses will be revamping their programs.
A recent nationwide survey of nearly 800 large and midsize employers found that only 6% of respondents plan to stop providing Group Health for their workers during the next three to five years.
Starting in 2014, the ACA will require all companies with at least 50 full-time (or equivalent) workers that don’t offer Health Coverage for their employees to pay a non-tax-deductible penalty of $2,000 for each employee. Because of these penalties and the resulting risk of losing talented workers, most employers believe they need to keep providing employees with Health Insurance. For competitive reasons, some businesses would have to raise salaries to offset at least some of the costs to employees for buying coverage on their own.
Many employers are considering a redesign of their Health Plans. For example, 37% of survey respondents expect to adopt a “house money/house rules approach,” which would reduce premiums for employees who participate in health risk questionnaires, biometric screenings, and so forth. Other companies might waive prescription drug copayments for employees who can show that they’re following medical advice for the treatment of chronic conditions.
In addition, 28% of respondents expect to provide employees a credit to buy Health Coverage through private insurance exchanges at the state level. This option is attractive to organizations that want to offer employees health care choices, while controlling the cost trends and administrative burdens of sponsoring a Group Health program. Some employers are already offering employees and retirees coverage through private exchanges.