Although a vast majority of employers plan to continue providing health care benefits for their employees, many are taking drastic action to mitigate the health care reform laws financial effects on their benefit strategies.
Despite the anticipated cost increases associated with the Affordable Care Acts various provisions including the coverage mandate for employers with at least 50 full-time employees, which takes effect next year for employers with 100 or more employees and in 2016 for employers with 50-99 workers almost 75% of employers say they definitely will continue offering group health benefits to their full-time employees in the coming plan year. However, that confidence seems to taper off, with just over half (55%) of employers saying they will very likely offer group health benefits five years from now.
The ACAs ongoing implementation has resulted in an average 6.8% increase in the cost of providing group health benefits in 2014, according to a survey of some 600 U.S.-based employers of varying sizes. The report was published by the Wisconsin-based International Foundation of Employee Benefit Plans.
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Many employers have taken action to increase awareness and communicate with their employees about ACA, which has resulted in greater participant engagement with their health care benefits, says Julie Stich, director of research at the IFEBP. In addition, most employers will continue to provide health care benefits in order to retain current staff, attract future talent, and maintain or increase employee well-being.
To minimize costs, many employers are asking plan participants to shoulder a greater portion of the cost of their health care benefits, including:
- Increasing out-of-pocket limits: +19.6% since 2012.
- Increasing participants share of premium costs: +12.3% since 2012.
- Increasing in-network deductibles: +14.7% since 2012.
- Increasing copayments or co-insurances for primary care: +10.9% since 2012.
We are seeing firsthand how the Affordable Care Act has had major implications on employers and their employees, says Michael Wilson, CEO of the IFEBP. Employers are taking a variety of actions to mitigate costs and in most cases are sharing the cost impact with their workforce.
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Still, employers have concerns about the future. More than two in five employers are expecting 2015 to be the year that will really have a costly impact due to the ACA, with fewer employers (21%) predicting 2018 the year the Cadillac tax, or excise tax on high-cost coverage, takes effect to hit home hard.
