Employers Adjusting for Additional Costs from Health Care Act

Nearly half of all employers (47.2%) have conducted an analysis to determine how health care reform legislation will impact their health care plan costs.

A majority of organizations (69.6%) expect the legislation will raise their costs this year, according to the Health Care Reform: 2012 Employer Actions Update survey from the International Foundation for Employee Benefit Plans. One-quarter (25.6%) estimate the legislation will increase their costs by 1% to 2%, followed by one-fifth (19.8%) estimating cost increases of 3% to 4%. Employers that have not conducted an analysis of plan costs are slightly more likely to estimate cost increases.  

Of provisions currently in place, extending coverage to adult children until age 26 was listed as the top cost driver (38.7%). The nondeductible excise tax on high-cost health plans in 2018 (19.6%) was cited as the top forthcoming cost driver.  

Approximately 14% of responding employers are anticipating making a change in their funding approach with their primary medical plan due to changes imposed by health care reform. Most organizations anticipating funding changes are adding stop-loss insurance.  

Increasing participants’ share of premium costs, done by more than one in five respondents (23.1%), is the most common technique used to address cost increases caused by health care reform. In the next two years, 20.1% of employers plan to increase employees’ proportion of dependent coverage cost to address cost increases.



As a result of health care reform, nearly one-third of surveyed organizations (33.4%) have conducted dependent eligibility audits or plan to do so in the next two years, and another 29.5% have analyzed or plan to analyze claims. One-third of respondents (33.2%) are considering offering the increased wellness incentives allowed in 2014 provisions.  

Approximately 14% of responding organizations have already started to redesign their primary health plan to avoid triggering the 2018 excise tax.  

Nearly half of employers (47.2%) describe their current focus with regard to health care reform as implementing changes to make their plans compliant with legislation. Nearly two in five are focused on beginning to develop tactics to deal with the implications of reform (39.1%) or developing a multiyear approach (37.3%). Slightly fewer than one-third describe their focus as “wait and see.”  

Among organizations in a “wait and see” phase, four in five (80.7%) are awaiting the Supreme Court decision, 62.4% are awaiting further regulatory guidance and 52.1% are awaiting the outcome of the 2012 presidential and congressional elections.  

The complete report is here.