Most employers will continue to provide health insurance after health reform provisions take effect in 2014
Eighty-one percent of employers said that they plan to continue to offer health care coverage over the next three years, even after the major provisions of the Patient Protection and Affordable Care Act (ACA) go into effect, according to a recent survey from Deloitte. The 2012 Deloitte Survey Of U.S. Employers found that only 9 percent of employers responded that they were likely to drop coverage within the next three years. The remaining 10 percent said that they were unsure of their plans regarding their health insurance plans.
The survey found that the larger the company, the less likely the organization is to indicate that they will drop coverage. For example, only 1 percent of employers with 1,000 to 2,499 employees predicted that they would stop providing coverage within the next three years, while 13 percent of employers with 50 to 100 employees stated that they were likely to stop providing health coverage during this period.
Employers in the retail (22 percent) and manufacturing (17 percent) industries reported that they were most likely to drop coverage, while those in the wholesale (0 percent) and service (7 percent) industries reported that they were least likely to do so. According to the survey, prohibitive cost is the chief explanation employers gave for choosing to abandon their health plans. The top reasons employers gave for deciding to keep their insurance coverage was to retain and attract good employees, and maintain morale and employee satisfaction.
To manage costs, many employers will resort to increased cost-sharing with employees and the use of wellness programs. Sixty-nine percent of responding employers claimed that they plan to increase insurance plan deductibles and copayments; 68 percent reported that they plan to increase employee premium contributions; 62 percent plan to increase wellness and preventive health programs; 52 percent said they plan to introduce consumer-driven health plans; 34 percent plan to reduce covered benefits; and 28 percent said they would consider shifting to a defined contribution arrangement. Another cost containment strategy under consideration is direct contracting with provider organizations.
ACA implementation. According to Deloitte, only 28 percent of employers believed themselves to be “prepared” to implement the ACA provisions that are to take effect in 2014. On the whole, larger employers considered themselves more prepared for these changes than smaller employers, the survey noted.
The future health insurance exchanges are viewed as a viable means of providing insurance to employees. However, smaller employers were more inclined to view the exchanges favorably. If the insurance exchanges prove to be effective at providing health insurance, employers might be more apt to drop coverage in the future. The survey examined various scenarios in which an employer would stop providing coverage, and determined that approximately 23 million to 65 million individuals might join a health insurance exchange by 2020.
Deloitte survey contains responses from 560 employers with 50 or more workers that currently offer their employees health benefits.