The number of employers planning to offer health care benefits to active employees for the foreseeable future is increasing, according to a recent survey, despite the projected increase in cost.
The projected 2013 health care cost of $11,507 per worker is an increase of 5.3%, according to Towers Watson, which is down from an expected 5.9% increase this year. Towers Watson asked 440 midsize to large companies for their health benefit expectations following the U.S. Supreme Court decision on health care reform, and the commitments have grown.
Some 88% of those questioned say they intend to continue to offer active employees health benefits, a significant jump from 71% last year. Roughly two-thirds say the Supreme Court’s decision on the Patient Protection and Affordable Care Act has affected their overall health strategy.
“While the most significant changes dictated by health care reform will not occur until 2014, it is essential that companies develop a strategic response and prepare for these changes well in advance of 2014,” says Ron Fontanetta, senior health care consulting leader at Towers Watson. “These changes will have a profound impact on the way health care is delivered and how many individuals acquire health insurance, most notably retirees.”
Indeed nearly 60% of the survey respondents report that they are somewhat to very likely to discontinue retiree medical plan sponsorship for post-65 retirees and 64% are mulling doing the same for pre-65 retirees.
Among the majority of companies planning changes to their health benefits, 55% plan to pass along a greater share of costs to the worker by increasing their part of premiums and 67% are weighing changes to spousal and dependent coverage.
Randall Abbott, senior health care consulting leader at Towers Watson, says health care remains a top priority in employee value propositions, but higher prices – and larger responsibilities – will be shared.
“… Due to the increasing costs of medical benefits and the additional burden of compliance, business leaders need to keep the pressure on to control costs, increase workforce accountability and engage workers to lead a healthier lifestyle,” Abbott says.
Of the projected $11,507 in 2013 health care costs, employees will handle $2,596 and employers $8,911. The total increase to workers is not large, but neither is it insignificant, Towers Watson says, as it outpaces projected pay raises.
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