The excise tax remains employers’ No. 1 concern with the health care reform law, with 45% of employers surveyed recently by Mercer citing it as a significant concern.

Beth Umland, director of employer research for health and benefits at Mercer, walked through the results of the survey of almost 900 employers on how they’re feeling about the Patient Protection and Affordable Care Act. Concern over the excise tax, also known as the “Cadillac Plan” tax, was also employers’ main concern in a similar survey Mercer conducted a year ago. The provision is set to take effect in 2018 and will impose an excise tax on the value of “excess” coverage.

“Whether they hit that threshold depends on more than just the richness of their benefits,” said Umland in a web briefing last week. “Things like demographics, age of their workers, union environments — these all play a role and employers can’t control those factors.” And the “repeal and replace” move that Republicans focused on so much at the beginning of the year has slowed considerably, mostly because of voters’ desire that the government focus on jobs, said Geoff Manville, government relations specialist with Mercer.

“Could the law survive a Republican sweep in 2012?” he asked. “Maybe not, but wholesale repeal won’t be easy for political and practical reasons.”

Few employers plan to terminate medical plans and have employees seek coverage in an exchange or on the individual market, the survey data reveal. Ninety-three percent say they are “not very” or “not at all” likely to discontinue coverage. Umland made reference to the McKinsey controversy earlier this year, in which the consulting firm released a survey showing as many as 30% of employers planned to drop coverage.

“We stand by our survey results but it is important to remember that this question only tells us what employers are thinking right now,” she said.

Most employers say enrollment grew this year because of PPACA’s provision that required employers to extend coverage to employees’ children up to age 26. Forty percent of employers saw cost increases of 1% to 2% as a result of raising the dependent eligibility age.

Some employers are considering a defined contribution approach to manage health benefits costs, with 26% saying they are considering keeping the employer contribution the same for all plans offered so the employees pay more for more expensive coverage. Nine percent say they’d consider giving employees a fixed dollar subsidy to purchase coverage, while 8% say they’d consider raising the employer contribution by a set amount each year regardless of the actual increase in plan cost, leaving increases above that amount to be paid by employees.

Related coverage:

2018 Cadillac Plan Tax

Five possible GOP maneuvers to untrack health care reform

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