Large employers say they're committed to providing active employee health care benefits in the near future despite criticisms that health reform will erode employer-sponsored coverage, new analysis finds.
During the next five years, 80 percent of employers in an annual survey from Towers Watson and the National Business Group on Health said they wouldn’t consider sending their employees into the exchanges without a subsidy, and 60 percent said they wouldn’t consider such a move even with a subsidy.
Still, employers admit they will plan for “aggressive actions” in response to changes influenced in part by the Patient Protection and Affordable Care Act, as some plan to drop spousal coverage and raise costs.
One thing employers say they will do is keep increasing the employees’ share of health care costs. Employees cost-sharing has climbed 5.1 percent since last year to reach $12,136 in 2013, but that’s the smallest increase in 15 years. Despite the relatively stable cost increases of the last few years, employees contribute 42 percent more for health care than they did five years ago compared to a 32 percent increase for employers, the survey found.
More than 80 percent of respondents plan to continue to raise the share of premiums paid by employees, including rethinking their subsidy strategy for dependents.
Subsidies for retiree medical coverage have declined, too, with only 15 percent of companies offering them to newly hired employees today. But with the opening of health care insurance exchanges in 2014, some employers may find cost-effective alternatives for their retirees.
Nearly 30 percent of employers are already facilitating access to an exchange-based solution for retirees in 2013, with another 36 percent planning to do so over the next three years.
“Employers are redefining their financial commitment to health care, in part to avoid the potential payment of an excise tax in 2018. Yet they are also mindful of a growing affordability gap for employees as health care costs take their toll on take-home pay,” says Ron Fontanetta, senior health care consultant for Towers Watson. “To combat these challenges, we expect employers to take more aggressive action, using emerging strategies to improve delivery, cost management and employee accountability.”
Over the next five years, the vast majority (92 percent) of employers anticipate at least modest change in health care, while nearly half of employers expect a “significant or transformative” change. More specifically, 49 percent expect more health care price transparency, and 45 percent expect to see new access points for health care delivery such as telemedicine, e-visits and data-enabled kiosks. And 39 percent are expecting providers to be reimbursed based on improvements in quality, efficiency and health outcomes.
Analysts surveyed benefits managers at 583 employers with at least 1,000 employees.