Many employers will continue to maintain health coverage under health reform, but for small employers that won’t be so easy, as they continue to be hit hard by health care costs, according to two recent surveys.
Employers Already Deciding Whether To Keep Coverage After Health Reform
Almost one-half of organizations have decided not to drop health care coverage for employees as a result of the new health care reform law, the Society for Human Resource Management (SHRM) found in a new poll released on June 28. Less than 2% of organizations surveyed said they have decided to drop coverage in light of passage of the Patient Protection and Affordable Care Act..
In its poll, “Organizations’ Response to Heath Care Reform,” SHRM found that 46% of organizations surveyed this month would not be ending health care coverage for employees because such a move would lower employee morale and job satisfaction. Organizations also cited competitiveness in recruiting and retaining employees and the fact that they value the health of their employees as reasons.
“Early indications are that employers are taking a prudent and thoughtful review of the implications of the health care reform law on their plans," said Michael Aitken, SHRM’s director of governmental affairs, "and that’s good news.”
Added Mark Schmit, SHRM’s director of research: “HR professionals and business leaders are taking an analytical approach to the decisions that they are making as a result of the new legislation. This is a strategic issue in which organizations are clearly recognizing the need to consider the costs in both monetary and human capital terms.”
Cost savings is the primary reason organizations would be likely to drop health care coverage and pay resulting opt-out fines. But for half of the respondents, it’s too early to know whether they will take such action.
Of the organizations that have decided not to drop health care coverage, 34% made the decision without conducting a formal analysis to determine the impact that reform will have on their health care plans. Twelve percent did an analysis before concluding that they would not end coverage, while 22% are currently conducting an analysis.
Overall, 41% of organizations are likely and 23% are highly likely to pass along any increased costs of health care coverage to employees next year, regardless of whether the increases are related to reform or not, the survey showed. And 34% of organizations are considering alternative health care plans — health savings accounts, for example — for employees as a result of health care reform.
The health care reform poll surveyed 819 randomly selected human resource managers and compensation and benefits professionals at private, public and government organizations with 50 or more employees. It was conducted June 16-23.
For more information go to http://www.shrm.org.
High Costs For Employees In Small Businesses
In the second survey, nearly 13% of workers with employer-sponsored health plans who worked in firms with 10 or fewer employees had premiums of $7,200 or more a year for single-coverage plans in 2008. These results are in a a recent News and Numbers from the federal Agency for Healthcare Research and Quality. This amount is significantly higher than the $4,704 average, national premium for employer- sponsored single-coverage health plans in 2008.
The federal agency's analysis also found that:
- By comparison, only about 4% of workers enrolled in plans sponsored by large businesses - with 1,000 workers or more - had premiums of $7,200 or more for employer-sponsored, single-coverage health plans. The national average premium in large business for this type of coverage was $4,340.
- For family coverage, about 7% of enrolled workers in small businesses had premiums of at least $19,000 in 2008, but only about 4.5% of employees in large companies had premiums that high. The national average premium for a family-coverage health plan in 2008 was $11,650 (less than 10 employees) and $12,595 (1000+ employees), respectively.
- Across all businesses, 5% of employees with single coverage had premiums of $7,200 or more, while 5% of employees with family coverage had premiums of $19,000 or more.
The data in are taken from the Medical Expenditure Panel Survey (MEPS), a detailed source of information on the health services used by Americans, the frequency with which they are used, the cost of those services, and how they are paid. For more information, go to http://www.ahrq.gov/news/newsnumix.htm.
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