In the year since health care reform became law, a new survey finds that employers across the U.S. are maintaining their health care benefits, implementing cost-sharing methods and assessing the long-term impact of reform on their organizations. “Health Care Reform: Employer Actions One Year Later,” released by the International Foundation of Employee Benefit Plans, uncovers actions employers have taken in the last 12 months and explores their plans for the upcoming year.

“For the most part, employers have moved beyond the ‘wait-and-see’ phase they were in just a year ago and are beginning to take action,” says Sally Natchek, senior director of Research at the International Foundation. “Although many employers are concerned about rising costs, very few have drastically altered or ended their health care benefits. Most employers remain committed to offering quality health care benefits to their employees.”

Employers anticipate rising costs

A majority of employers (60 percent) have conducted analysis to determine how health care reform will impact their 2011 plan costs. Among respondents analyzing cost impacts, the largest proportion (36 percent) estimates health care reform legislation will increase their health care costs in 2011 by 1 to 2 percent. Although extending coverage to adult children to age 26 is still seen as the top driver of cost increases, administrative costs and cost-shifting due to reduced Medicare and Medicaid payments to providers have emerged over the past year as major concerns.

To help ease the increased costs brought on by health care reform, 40 percent of employers are increasing employees’ share of premium costs, 29 percent are raising in-network deductibles and 28 percent are increasing employees’ proportion of dependent coverage cost. Many employers also plan to increase out-of-pocket limits and copayments or coinsurance for primary care (27 percent and 24 percent, respectively).

Employers maintain benefits

Very few employers plan to eliminate or reduce their health plan benefits as the result of health care reform, the survey shows. Just 2.6 percent plan to cut health benefits for new hires, 1.6 percent plan to drop dependent coverage, 0.9 percent will close health benefits to new hires and 0.8 percent will discontinue health benefits for active workers or retirees. Less than one percent of employers plan to stop providing employees with health care coverage in 2014, when “play or pay” provisions become effective.

Additionally, although required only to extend health care benefits to dependents until age 26, 60 percent of employers are going a step further and changing the eligibility requirements for dependents in other benefit plans (such as dental or vision) to conform to the requirements of their medical plans.

Even though employers report several benefits of maintaining their grandfathered status—namely that their plans are exempt from the appeals process and the requirement to provide coverage for preventive care with no cost sharing or annual limits—just 30 percent expect to maintain grandfathered status beyond the next three years.

“Maintaining grandfathered status will be very challenging for employers,” Natchek says. “Plans can lose the status in numerous ways including reducing benefits, raising coinsurance or significantly raising copayments or deductibles. To remain grandfathered, an employer will be able to make only limited changes in their health care plan. This does not appear feasible for most organizations.”

Wellness programs on the rise

Another effect from health care reform is increased wellness initiatives. Nearly one in five employers have adopted or expanded their use of wellness initiatives in the last 12 months (18 percent), and 27 percent plan to do so in the next 12 months. Additionally, 38 percent are expanding the use of financial incentives to encourage healthy behaviors, and 27 percent are adopting or expanding their disease management offerings.

Instant Insights /

One year later: What employers have done about health care reform

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