From the February 2012 issue of Benefits Selling Magazine • Subscribe!

Employers skeptical of health reform

Employers are still torn on how they will respond to health care reform and at the very least, skeptical of its potential.

Employers are still torn on how they will respond to health care reform, but a survey from GfK Custom Research North America says most are, at the very least, skeptical of its potential.

Though the majority of employers surveyed (56 percent) say that they’re likely to continue to offer employer-sponsored health insurance after health reform is enacted, 12 percent of benefits decision-makers say they would be very or somewhat likely to drop coverage. And many—32 percent—of the 502 private-sector companies surveyed are unsure what they will do.

Projections vary by the size of the employer, with only 4 percent of decision-makers surveyed from those companies with 500 or more employees considering terminating coverage completely. In addition, decision-makers who say they are familiar with health reform are less likely to foresee their dropping coverage (7 percent, versus 15 percent among those not familiar).

Many surveyed worry reform provisions either won’t slow the increase in health care costs or will make cost trends worse.

Only 11 percent believe costs of health benefits will increase more slowly than if no reform had passed, while 51 percent think that costs will increase more rapidly. Many remain uncertain about the impact of health care reform, with 38 percent not sure about the effect of health reform on future costs.

Support for health reform is lacking from those surveyed who have experienced the greatest recent cost increases. Those who have experienced the highest recent price increases are also the least likely to see health care reform as potentially improving the situation. Thirty percent say they have seen costs increase by 9 percent or more annually over the last three years, and these companies have the most negative attitudes toward health reform.

As employers have seen spikes in the cost of offering health care benefits, many report they have reacted by increasing premium costs, co-pays and deductibles for employees and dependents. With health care costs continuing to increase in recent years, 20 percent of employers say they have even seriously considered cessation of health care benefits.

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