The National Business Group on Health (NBGH) spoke out recently on the plan unveiled by the House Republican Task Force on Health Care Reform. Employee Benefit News caught up with Steve Wojcik, vice president for public policy at NBGH, to discuss the plan and the current state of employee healthcare benefits.
EBN: Employers continue to look for ways to reduce their healthcare spending on employees. What is NBGH’s assessment of employers’ healthcare costs at present and moving forward?
Wojcik: Employers still view rising healthcare costs as a major challenge. According to our 2015 survey on plan design, large employers say they expect their healthcare costs to increase 6% this year. If they made plan design changes, they expect to knock a point off the increase, to about 5%. That’s lower than the years of double-digit increases, but still two to three times faster than overall economy’s growth. This increase will have to be made up by lowering labor or other costs, or reducing profits.
EBN: In what ways, besides limiting employee choices, can employers contain healthcare costs?
Wojcik: Options employers are using more frequently include consumer-directed health plans—account-based plans like Health Savings Accounts (HSAs)—and health reimbursement arrangements with accompanying high-deductible plans. Another approach is to increase the share of costs borne by employees in tandem with wellness programs, care management and other tools designed to guide employees to the most value-based care alternatives.
EBN: How do healthcare benefits impact employers’ ability to recruit and retain employees?
Wojcik: Healthcare benefits are the second most important consideration for people when they are interviewing for a job or looking to change jobs. Overall compensation is the first.
EBN: What recommendations in the House Republican Task Force on Health Care Reform plan does the NBGH like, and why?
Wojcik: We are happy to see the proposal to eliminate the excise tax. We are also glad to see that they support expanding the ability to contribute to and use HSAs. According to our findings, about 86% of large employers have at least one consumer-directed health plan. That is pretty significant. And in terms of what they propose related to wellness incentives and programs, as long as an employer is complying with the rules under HIPPA and the expanded incentives permitted in the Affordable Care Act, they wouldn’t have to worry about violating ADA (Americans with Disabilities Act of 1990) or GINA (Genetic Information Nondiscrimination Act of 2008).
EBN: The House Republican plan is calling for changes to the tax treatment of employer-sponsored health benefits. What are the proposed changes and what is NBGH’s position?
Wojcik: There aren’t a lot of specifics, but they support capping the exclusion of income for employees on the value of their health benefits, although they do say the cap would be high enough that it wouldn’t affect that many people or that many plans. Our concern is that this will increase costs for employees. And given the federal budget pressures, it would be very easy and tempting for Congress to lower those caps and tax more benefits over time. We are also concerned about the justification for this, that the tax exclusion is leading to higher healthcare costs. Frankly, we disagree. We think Congress’ efforts would be better focused on getting rid of supply-side, not demand-side, drivers of healthcare costs.
EBN: What are some of the key factors driving healthcare spending?
Wojcik: We still largely pay on a fee-per-service basis and that drives ups costs, although we’re making progress in moving away from that.
