U.S. employers believe that managing the changes resulting from health care reform is a critical business issue, yet few organizations have conducted a full analysis of the legislation’s financial impact, according to a new report from Ernst & Young.
Results of the survey of 381 executives show that companies across a variety of industries clearly recognize the need to plan adequately so they are in compliance with the Patient Protection and Affordable Care Act, with 84% of respondents stating that such planning is important.
However, more than 40% indicated they have not undertaken what they consider to be a full analysis of the financial implications of the new law on their business.
"Companies must take a hard look at what the overall impact of the health care reform law will be on their organization, starting with an analysis of their employee base," says Jim Bosserman, director of the performance and reward group at Ernst & Young LLP.
"They will also need a roadmap to help guide them through the various changes, in addition to a solid plan for communicating these items to their employees," he adds.
Key findings from the report, titled "Moving forward: Companies speak out on health care reform, a survey of senior executives," include:
- About 35% of employers surveyed said their company’s biggest challenge or risk arising from the law will be the impact of health care costs on profitability, while 31% cited the impact of added expenses associated with complying with the law.
- 39% reported their companies have evaluated what the full effect of the law will be on the cost of employee health benefits. Of this group, 43% said they anticipate significant cost increases as a result of the law, and only 1% said they expect it to decrease costs.
- 92% said they intend to continue offering health care benefits to employees, while 8% said they were considering discontinuing employee health care benefits.
- 76% of respondents said their companies are at least somewhat likely to increase the amount employees pay for their health care coverage as part of their cost-reduction strategies.
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