New Health Reform Survey Finds Business As Usual for Employers in 2013

Many taking a wait and see approach regarding impact of Affordable Care Act on health and pharmacy benefits

CHICAGO, Oct. 23, 2012 /PRNewswire/ -- Employers say it will be business as usual in their approaches to health benefits, as they plan for new developments in the coming year due to the Affordable Care Act (ACA), according to a new survey by the non-profit Midwest Business Group on Health (MBGH) in collaboration with The Benfield Group. The survey polled employers around the country to gather information on their strategic thinking in planning for 2013-2018 to prepare and position their organizations for complying with the ACA now that it's been upheld by the Supreme Court.

"Given the focus on health care and the economy in the presidential election, we conducted this survey to help our employer members benchmark and better understand their options for offering health coverage," said Larry Boress, MBGH president and CEO. "After 2013, the majority of employers responded that they will be adjusting to the 'new normal,' making changes to their benefit design strategy in response to the post-ACA environment. The majority plan to continue to offer benefits."

Key survey findings

  • In preparation for the 2018 40% excise tax on high cost "Cadillac" plans, 31% of employers indicated they plan to reduce their benefits in 2014-2016, with 41% responding they will do so for 2017-2018.
  • Only 9% of employers indicated that they planned to participate in state health insurance exchanges when they begin in 2014-2016. While there is interest in private health insurance exchanges, at this time only 4% believe they will use these for active employee coverage in 2014-2016, while 11% indicated they will move toward private exchanges for post-65 retirees.
  • For the next few years, there is little indication that employers plan to drop health care coverage and provide employees a set amount to buy health care coverage elsewhere.
  • Employers responded that 57% currently offer consumer directed health plans (CDHP), such as health savings accounts and health reimbursement accounts, as a plan option and indicated that this would increase to 62% in 2013 and 71% through 2018. All large employers indicated they will offer CDHPs by 2018. More than a quarter (29%) of all employers will make their CDHP offering their only plan available to employees by 2018.
  • More than half (52%) of employers plan to make vision and/or dental coverage voluntary benefits in 2013, increasing to 55% by 2017-2018.

"Employers still believe that health benefits are vital to attract talented employees and maintain a productive workforce," says Scott Thompson, President Healthcare Practice, The Benfield Group. "This research found that most employers, especially those with more than 200 employees, will not drop employee benefit coverage in the foreseeable future. Instead, they'll control costs in other ways like implementing CDHPs, basing premium contributions on the number of dependents covered (unit pricing) and reducing benefits to avoid the Cadillac tax. Employers will continue to be active purchasers of health care."

Survey details

The online survey was conducted in August 2012 on employers' views on health reform. There were approximately 111 respondents from across the U.S. in a variety of industries representing self-insured (77%) and fully-insured (23%) employers. The respondents ranged in size from large employers (29% with more than 5,000 employees), to mid-size (38% with 1,001 to 5,000), to smaller (33% with less than 1,000).

About The Benfield Group

The Benfield Group is a health care market research, strategy and communications firm founded in 1989. The organization helps health care companies focus on employers as key customers, to help them develop and implement effective employer strategies. The Benfield Group also provides strategic communications support for employers to help them gain executive and cross-organizational support for human capital improvement strategies.

About the Midwest Business Group on Health

Celebrating more than 30 years of advancing value in health benefits management, the non-profit Midwest Business Group on Health (MBGH) is one of the nation's leading business groups of private and public employers. MBGH's more than 100 members represent over 3 million lives, spending more than $3 billion on health care benefits annually.

SOURCE Midwest Business Group on Health; The Benfield Group