Most employers sticking with current group health coverage next year

While employers expect to continue implementing cost-sharing measures in their health care plans in 2014, most plan on keeping group coverage for the next year. And just 5% of employers anticipate moving employees to a private exchange, according to the 2013/2014 Verisight and McGladrey Compensation, Retirement and Benefits Trends Survey.

Additional survey findings reveal that only 4% of respondents are fully cutting coverage and will instead offer employees a subsidy to gain coverage through the state or federal exchange. Some of the more common cost-sharing measures include increasing premiums (35%), raising co-payments or co-insurance (23%), increasing deductibles (22%) and establishing wellness programs (22%.)

“With the delay in the employer mandate, many employers naturally have pushed the play-or-pay decision process down the road,” said Bill O’Malley, director with McGladrey’s national tax office in Washington, D.C. “However, some employers, particularly those employers with a large percentage of low-income workers, are looking at adopting a play-and-play approach of moving a portion of their workforce to either the new federal and state health care marketplaces or preferably to Medicaid in those states that have expanded Medicaid.”

This year, 86% of respondents reported experiencing an increase in health premiums, up from 79% in 2012. More than one-third (36%) said their health plan costs rose by at least by 8% from 2011 to 2012.

Although the economic recovery has employers watching benefits costs, they also realize the need for a complete rewards program that appeals to top talent. The most important consideration when making total reward decisions, according to the survey, is cost of health benefits, cited by 59% of respondents. Other significant factors include corporate performance (50%), retaining key employees (47%) and attracting key employees (42%).