A sizable majority (84 percent) of U.S. employers expect to revisit their health care benefit strategy by the end of 2010 in light of health care reform, according to a survey fielded June 10-30, 2010, by Fidelity Investments' Benefits Consulting group.
“Company executives are taking a close look at their overall benefit strategies in the wake of the new health care reform legislation,” said Sunit Patel, senior vice president of Fidelity’s Benefits Consulting services. “Over the long run, health care reform could lead to significant changes to an employee’s benefits well beyond health care coverage.”
The study found that while the majority of employers expect health care reform to lead to cost increases over the short and long term, smaller employers expressed greater fear about near-term cost increases. Nearly half (49 percent) of smaller employers (500 employees or less) anticipate significant increases in health care costs in the short term, while just 25 percent of larger employers (500 employees or more) indicated the same concern.
“There is a lot of confusion out there about the real impact of the health care legislation and the accompanying costs,” added Patel. “Depending on a company’s strategy in designing its future health plans, cost increases can be minimized.”
To Offer or Not Offer Coverage
Most employees (64 percent) said that their organization was not seriously thinking about dropping employee health care coverage. However, 20 percent indicated that they were considering no longer offering health care coverage. A higher percentage of smaller companies (22 percent) said they were seriously considering eliminating health care coverage, compared with larger employers (14 percent).
A Key Tool to Attract and Retain
Most respondents agreed that health care coverage remains an important tool to attract and retain employees. More than eight out of 10 employers (85 percent) said that health care benefits will continue to be just as important, or more important, in the future.
High Deductible Plans and the Future
When asked about the health plan design that would be most attractive to their organization going forward, more than half (55 percent) of larger employers chose a high-deductible health plan (HDHP), followed by a preferred provider organization (45 percent) and a health maintenance organization (18 percent).
If the respondent’s organization was already using an HDHP as one of their health care options, they were more likely to consider this plan type to be the more likely option for their employees in the future, with 60 percent of this group choosing an HDHP as making the most sense for their organization.
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Additional Perspectives
In a June 2010 poll of Society for Human Resource Management members:
• 46 percent of respondents said they had decided not to drop health care coverage for employees as a result of health care reform.
• 34 percent said their organizations were considering offering alternative health care plans to employees as a result of the reform law, such as less expensive coverage plans and higher-deductible plans linked to health savings accounts.
In a May 2010 survey of members of the International Foundation for Employee Benefit Plans and its affiliate, the International Society of Certified Employee Benefit Specialists:
• 87 percent of respondents agreed that their organizations would continue to offer health care benefits because they are critical to employee recruitment and retention and to remaining competitive.
• 21 percent were planning to add or increase emphasis on high-deductible health plans in the 12 months following the survey.
• Close to 70 percent said they were likely to focus on account-based plans linked to health savings accounts. |
Stephen Miller is an online editor/manager for SHRM.
Related Articles:
In Wake of Health Care Reform, Open Enrollment Presents Opportunities for Employers, SHRM Online Benefits Discipline, July 2010
SHRM Poll: Responding to Health Care Reform, SHRM Online Benefits Discipline, June 2010
Employers Consider Their Health Care Reform Options, SHRM Online Benefits Discipline, June 2010
Increased Health Care Cost Shifting Expected in 2011, SHRM Online Benefits Discipline, June 2010
Group Health Insurance Rates on the Rise for 2011, SHRM Online Benefits Discipline, June 2010
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