Health care in the U.S. is a hot button issue but the early consensus is that the Affordable Care Act has been integrated well by employers.
One of the big concerns [about the ACA] is this is going to drive up our premiums and the cost of healthcare, says Christopher Ryan, vice president, Strategic Advisory Services at ADP.
But, he adds, this has not materialized as originally thought. I give credit do business, he adds, I think business looked very carefully at their current practices and has been well managed.
A new study suggests that premiums for employees and headaches for employers have been minimal. The 2015 ADP Annual Health Benefits Report says that for companies with more than 1,000 employees, insurance premiums have risen 9.4% since 2011 and only 2.6% from 2014 to 2015.
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Ryan says one of the things that has helped is the increase in consumer directed health. Health spending accounts with higher deductibles is part of the strategy that has kept premiums down.
Also, explains Ryan, employers brought in consumer-oriented products with financial incentives and/or wellness and prevention programs, as well as decision support tools and administrative processes. All of those trends were already underway but what health care reform did is it gave employers a new incentive to do it better and do it faster.
Separately, the study shows that while eligibility rates increased from 2013 as the economy improved, those that elected coverage decreased indicating that perhaps employees had found alternative forms of coverage.
Taken together, the results of the report suggest that large employers have been effective in managing overall health costs despite concerns over ACA mandated changes, adds Ryan. Companies may be struggling with ACA compliance and reporting requirements, but five years in, this study reveals the underlying cost trend for large employers remains modest.
