With the Supreme Court ruling now finalized and the minimum essential health insurance provisions in place, companies have begun to ask us "what's next?" or "what will the financial impact be for our company in 2014?" My belief is that by taking a proactive approach to the individual mandate and understanding the impact on your company's financials, you will be able to make that critical decision whether to continue offering a group health care plan or allow employees to elect coverage through the state-mandated exchanges.
Based on external research, a recent study by Deloitte has found that approximately one-in-10 employers in the U.S. intend to pay the penalty imposed on employers for opting out of group health coverage. This number, however, does not reflect an additional 10% of employers who weren't sure if they would continue coverage. An overarching theme heard from our clients is that the benefits program offered today is instrumental in attracting, retaining and engaging employees.
Ultimately, the decision to pay or play is a strategic human resources decision that will not only impact the company's fixed costs, but also the level of engagement and retention within the company. A thorough analysis delicately weighing the financial and nonfinancial factors must occur to ensure that the decision falls in line with the company's overall business and HR strategy.
Timothy Wojcik is director, financial analysis and reporting at Roller Consulting in Conshohocken, Penn.
Employer views
According to the Deloitte report, Opinions About the U.S. Health Care System and Plans for Employee Health Benefits, 9% of companies representing 3% of the workforce anticipate dropping coverage in the next one-to-three years. Still, many anticipate making changes to their plans: * 69% expect to increase employee cost sharing (deductibles and co-pays).
* 68% anticipate increaseing employee premium contributions.
* 62% plan to increase wellness and preventive health programs.
* 52% expect to introduce high deductibe health plans/consumer-driven health plans.
* 34% anticipate reducing covered benefits.
* 18% anticipate having to narrow the networks of hospitals and physicians.
