Employers: About Face on Health Insurance

December 11th, 2012
in econ_news, syndication

Econintersect:  Five months ago (in June) nearly 75% of employers were uncertain about how to plan for health care insurance coverage for employees.  A recent survey by by the International Foundation of Employee Benefit Plans (IFEBP) found that 59% of employers are now "confident in being more definitive about maintaining coverage."   Now a total of 84% of employers say they are planning on continuing health coverage, up from 77% in June.  Only 1% of employers said they intended to drop health insurance plans for their employees.  The percentage had been higher in June.


Follow up:

Some other findings from the recent IFEBP survey:

  • 77% of respondents are well along in terms of meeting provisions of PPACA (Patient Protection and Affordable Care Act, aka Obamacare);

  • 60% are either very or extremely far along in preparing for future requirements;

  • 48% report no plans to add or reduce number of employees;

  • 11% will reduce staff because of costs added by PPACA;

  • 5% will cut back on hiring to stay below 50-employee PPACA threshold; and

  • 4% will add staff to mainatain PPACA compliance.

Following in the complete press release by the IFEBP:

84 Percent of U.S. Employers Are Likely to Provide Health Coverage in 2014

Majority of Organizations Are Moving Beyond “Wait & See” Approach to Health Care

Brookfield, Wisconsin—An overwhelming majority of U.S. employers – 84 percent – are very likely or definitely will continue to provide employer-sponsored health insurance for all full-time employees when the Affordable Care Act-mandated exchanges open in 2014, according to the International Foundation of Employee Benefit Plans’ 2012 Post-Election Survey [PDF].

“With President Obama’s re-election confirming that the ACA will survive, we saw a seven percent increase in organizations planning on providing health care benefits from when we asked our members following the Supreme Court’s ruling in June (77 percent),” said Michael Wilson, International Foundation CEO. “This research showed that one percent are saying they definitely won’t, a bit lower than we saw in June.”

The top reasons Foundation members plan to provide coverage in 2014 are:

  • To maintain/increase employee satisfaction and loyalty (40 percent)
  • To retain current employees (24 percent)
  • Part of a collective bargaining agreement (21 percent)

With almost three quarters of the respondents from June’s post-Supreme Court Decision Survey stating that they were in a “wait and see” mode in terms of health care planning until after the presidential and congressional elections, 59 percent stated that their organizations are now confident in moving beyond the “wait and see” approach this week. In fact, 77 percent state that they are well along in terms of keeping current with ACA provisions, with 60 percent stating that they are either very or extremely far along in terms of preparing for future ACA provisions.

“Almost 60 percent of our members told us that the reason they’re hesitant to move forward with health care reform is that they’re waiting for further regulatory guidance,” said Wilson. “As an education-based organization, the Foundation will continue to work with our members to make sure they’re up to date on the current regulations and provide support in assisting them in becoming compliant.”

Aside from the organization’s health care focus shifting to complying with legislation (57 percent), most are shifting their attention to wellness (52 percent), Value-Based Health Care (40 percent) and consumer driven health plans (26 percent).

“We’re not surprised by these findings since our Wellness Survey from earlier this year told us that seven in 10 U.S. employers offer wellness programs, “ said Paul Hackleman, International Foundation Health Care and Public Employer Analyst. “As one of the Foundation’s major initiatives, Value-Based Health Care is gaining more acceptance and we’ll continue to work with our members to help implement these programs.”

When the exchanges are put into effect in 2014, 25 percent of the respondents are likely to direct only some employees to the exchanges while continuing to provide coverage for others as opposed to dropping coverage for all employees.

“One can assume that the 63 percent of organizations that will most likely provide a subsidy to those employees that were shifted to the exchanges are sensitive to promoting employee loyalty,” said Julie Stich, the International Foundation’s Director of Research.

Employers for the most part are not dramatically adjusting their hiring plans for the next two years based on the ACA:

  • No plans to add or reduce workforce (48 percent)
  • Will reduce workforce due to overall costs directly associated with the ACA (11 percent)
  • Will reduce hiring to stay under 50-employee ACA threshold (five percent)
  • Will add staff to help keep their health care plan compliant with the ACA (four percent)

The 2012 Post-Election Survey was administered December 3-4 to measure organizations’ reactions to November’s General Election. Responses were received from 593 plan administrators, trustees and organizational representatives. These individuals represent a comprehensive range of organizations with respect to size, sector and region.

John Lounsbury


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