Wednesday, January 4, 2012

Most Employers Making Moderate Changes To Health Care Plans In 2012

Most employers (88 percent) are planning small or moderate changes to their health care plans for 2012, though roughly half (45 percent) will rethink their long-term health care strategy during the year, according to a recent survey from consultant Towers Watson. The survey, Health Care Changes Ahead Survey, was conducted to better understand how employers are handling both current cost concerns and the development of a future health care strategy following the passage of the Patient Protection and Affordable Care Act (ACA).

While plan changes are expected to be modest in 2012, the number of companies unsure of the magnitude of future plan changes increases from 2 percent in 2012 to 51 percent in 2014. More than two-thirds (71 percent) of employers expect to continue offering health coverage to their active employees through 2014. An even higher percentage (84 percent) believe health care benefits will continue to be a key component of their overall employee value proposition beyond 2014, noted Towers Watson.

Half of the companies said that it is not at all likely that they will offer a financial subsidy instead of health plans for active employees working 30 or more hours a week , while only 2 percent say it is very likely they will do so. When it comes to deciding whether to continue sponsorship of employee health care benefits, 78 percent said that they are planning to follow the lead of other large employers. In addition, survey respondents also are considering other changes, including reducing or eliminating coverage for part-time employees, retirees, and pre-retirees.

Towers Watson found that 54 percent of employers are confident that the ACA will be implemented within the anticipated timeline. The survey also found the following about specific ACA provisions:

  • 70 percent are skeptical that Health Insurance Exchanges will provide a viable alternative to employer-sponsored coverage for active employees in 2014 or 2015.
  • 88 percent plan to take steps to control their costs and avoid the impact of the ACA’s excise tax, due to take effect in 2018. More than half (56 percent) believe their current plans will trigger the excise tax.
  • Seven out of ten employers expect to lose grandfathered status by 2012.

The survey contains responses from 368 midsize to large U.S. employers. For more information, visit

For a comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, just click here.


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