Four recent surveys confirm the notion that the majority of employers will continue to offer employer-sponsored health benefits in 2012 and beyond. The national surveys, conducted by Mercer, Towers Watson Health Care, GfK and Kaiser Family Foundation/Health Research & Educational Trust, yielded fairly consistent results that indicate employers overall continue to view their health benefits plans as a key component of the employee benefit offerings. The survey feedback also confirms that few employers plan to terminate their health benefit plans when state health insurance exchanges, mandated by the Patient Protection and Affordable Care Act (PPACA), become operational in the fall of 2013.
Mercer Study
Mercer's 2011 National Survey of Employer-Sponsored Health Plans involved responses from 2,844 employers in both the public and private sector with 10 or more employees. Despite employers' concerns about the impact of reform," Mercer said in a statement, "when asked how likely they are to terminate their health care plans after state-run insurance exchanges become operational, the great majority says 'not likely.'"
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Enrollments in employer health benefits plans increased by 2% over the previous year, according to the study. This increase was attributed to a PPACA provision that requires coverage be extended to dependents up to age 26. Specifically, employers in the survey anticipate an additional 2% increase when PPACA's rule requiring employers to automatically enroll newly hired, or newly eligible, full-time employees into a health plan becomes effective in 2014. Employers questioned do not support the contention that PPACA would cut the cost of health insurance benefits. Forty-five percent of the respondents think PPACA will increase their costs. Fifteen percent said it would not increase their costs and 29% were uncertain of the ultimate impact.
Towers Watson Study
The 2011 Towers Watson Health Care Trend Survey found "over two-thirds (71%) of the respondent companies indicated that they will continue to offer health care benefit coverage to their active employees through 2014." The majority of the remaining 29% are unsure about whether they will continue their employer-sponsored health benefit plans. More than 53% of employers believe health care reform will be implemented within the timeline set forth, but 70% of employers do not believe health insurances exchanges will be the new solution to employer-sponsored coverage in 2014 or 2015.
Controlling costs continues to be a constant, according to the Towers Watson research. Between now and 2014, 74% of employers report they will increase the offering of account-based health plans, 58% say they will increase the use of preferred provider networks and 49% say they will use value-based benefit designs. More than three-quarters responding believe health care benefits will remain a key component of their overall employee value proposition beyond 2014.
GfK Study
The results of GfK Custom Research North America's 2011 survey are quite similar to the above studies. Exactly 502 private-sector companies were surveyed that currently over health insurance. Fifty-two percent of employers surveyed indicate they will definitely continue to offer employer-sponsored health benefits. Only 12% say they will be "very likely" or "somewhat likely" to drop their employer-sponsored health benefits. The remaining 32% are unsure of their future course.
The size of the employer was important to the results of the GfK study – only 4% of employers with 500 or more employees are contemplating terminating their employer-sponsored health benefit plans, according to the survey. Fifty-one percent do not think the cost of health benefits will be higher due to PPACA. Only 11% think their health insurance benefit costs will decrease because of the health insurance reforms. Perhaps most troubling for PPACA proponents is that only 7% of respondents (who claim to be "very familiar" with PPACA) think health insurance reforms will cut their future benefits costs.
Kaiser Study
Finally, the Kaiser Family Foundation's Employer Health Benefits 2011 Annual Survey, which included 3,184 randomly selected public and private firms with three or more employees, is interesting because it found that "…employers added 2.3 million young adults to their parents' family health insurance policies as a result of the health reform provision that allows young adults up to age 26 without employer coverage on their own to be covered as dependents on their parents' plan. Young adults historically are more likely to be uninsured than any other age group."
Further revealing, the survey found that 56% of covered workers are in "grandfathered" plans as defined under health reform. Grandfathered plans are exempted from some health reform requirements, including covering preventive benefits with no cost sharing and having an external appeals process, according to the survey results. "To obtain this status, employers cannot make significant changes to their plans that reduce benefits or increase employee cost."
This specific blog really just focused on the issue of employers' attitudes about continuing to offer health insurance coverage in a post-PPACA environment. Readers are encouraged to review the studies to learn about other trends and concerns that are reported by each study.
BenefitMall will continue to bring these issues to your attention as they arise. Please visitwww.benefitmall.com to view past Legislative Alerts. Or, you may visitwww.HealthcareExchange.com for blog posts, polls, surveys and numerous resources.
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