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Employers watch, wait on reform

By Jay MacDonald · Bankrate.com
Thursday, September 6, 2012
Posted: 11 am ET

Many American businesses are taking a watch-and-wait approach to health care reform by postponing significant changes to employee health insurance plans until after the 2012 presidential election or the opening of state health exchanges in 2014.

The good news: 88 percent of 440 mid- to large-size companies polled in the Towers Watson 2012 Health Care Changes Ahead survey say they are firmly committed to offer health insurance benefits to their workers for the foreseeable future, up 17 percentage points from a year ago.

The bad news: The terms of future coverage, including the percentages of premiums charged to employees, are likely to change for the worse for many workers.

Nearly two-thirds (63 percent) of the companies polled said they will consider changing plan options, nearly 4 in 10 (38 percent) may significantly reduce coverage subsidies for spouses and dependents, and nearly 3 in 10 (29 percent) may implement spousal waivers or surcharges.

Two-thirds of the companies say they're currently reassessing their employee health plans as a result of this summer's Supreme Court ruling that upheld the bulk of the Affordable Care Act. The other third are waiting to see if the Republicans can make good on their repeal-and-replace promise by winning the White House, or failing that, whether the mandated health exchanges will prove a viable option for some employees.

Some companies plan to use cost-shifting strategies to shore up their health insurance plans. Of those polled, 42 percent say they plan to increase their employees' share of the cost of premiums next year by 1 to 5 percentage points, while 13 percent say they'll boost what employees pay by more than 5 percentage points.

Most businesses surveyed say they'll need to make changes to avoid the 40 percent excise tax on high-value "Cadillac" plans that begins in 2018. One popular way to do this is to offer account-based health plans such as health savings accounts or health reimbursement arrangements. The survey indicates that nearly one in three (30 percent) employers will offer these options next year.

Towers Watson senior health consultant Ron Fontanetta says waiting is fraught with risk.

"While the most significant changes mandated by health care reform will not occur until 2014, it is essential that companies develop a strategic response and prepare for these changes well in advance of then," he says. "These changes will have a profound impact on the way health care is delivered and how many individuals acquire health insurance, most notably retirees."

How are things at your workplace? Is your health insurance showing signs of change?

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