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SHRM Poll: Responding to Health Care Reform
 

By Stephen Miller  6/28/2010
 


HR professionals express a high degree of uncertainty about how their organizations will respond to the landmark U.S. health care reform enacted in March 2010, according to the first in a series of polls conducted by the Society for Human Resource Management (SHRM) on the impact of reform on employers and employees. Key findings from the initial poll, conducted June 16-23, 2010, are presented below.

A random sample of HR professionals working at organizations with 50 or more employees were asked the following questions:

Will your organizations drop health care coverage?
Respondents at nearly half of the organizations (46 percent) said they have decided not to drop health care coverage for employees as a result of the new health care reform law. Of these organizations, 34 percent made this decision without conducting an analysis to determine whether to continue offering health care coverage or to drop coverage and pay opt-out fines. Twelve percent did conduct such an analysis and decided not to drop coverage. More than one-third of the organizations (37 percent) are still conducting or plan to conduct an analysis on the impact of health care reform.

Larger organizations were more likely to report that they are currently conducting an analysis on the impact that health care reform will have on their health plans.

What would be the impact of dropping health care coverage?
Regardless of whether dropping health care coverage and paying an opt-out fine would be more economically sound, the primary reasons behind the organizations’ decisions not to drop health care coverage were:

  • It would lower employee morale and job satisfaction.

  • It would make organizations noncompetitive in recruiting new employees.

  • It would send the message that the organization does not value the health of its employees.

  • It would significantly increase employee turnover at all levels of the organization, including for top employees.

Smaller organizations were more likely to report that dropping health care coverage would lower employee morale and satisfaction.

Reasons to Maintain Coverage

Respondents said the primary reason or reasons for keeping coverage are because dropping health care coverage would:

  • Lower employee morale and satisfaction: 41 percent.

  • Make organizations noncompetitive in recruiting new employees: 33 percent.

  • Show that organizations do not value the health of their employees: 28 percent.

  • Increase employee turnover significantly at all levels of the organization: 26 percent.

  • Make organizations noncompetitive in retaining top employees: 26 percent.

Will employees pay more?
According to respondents, 41 percent of the organizations are “likely” and 23 percent of organizations are “highly likely” to pass increased health care coverage costs (such as higher premiums and co-pays) on to employees in 2011, regardless of whether these costs are directly related to the new health care reform law. Only 12 percent were “unlikely” or “highly unlikely” to do so, while 23 percent were unsure whether they would.

Alternative health care plans on the rise?
Thirty-four percent of the respondents said their organizations are considering offering alternative health care plans to employees as a result of the health care reform law, such as less expensive coverage plans and higher-deductible plans linked to health savings accounts. Thirty-six percent were unsure whether they would offer alternative plans.

Too Early to Tell

The primary reason organizations would be likely to drop health care coverage and pay opt-out fines would be to achieve significant savings for the organization. Yet 50 percent of organizations indicated that they are unsure if they would be likely to drop coverage at this time even if it were an economically sound decision for their organization.

Only 14 percent of respondents said they believe that dropping health care coverage and providing an equal amount of compensation to employees to replace the loss would be viewed positively by employees.

The survey sample consisted of 819 randomly selected HR professionals with the job title of manager and above, as well as HR professionals working in the compensation and benefits area.

Stephen Miller is an online editor/manager for SHRM.

Related Article:

Health Care Reform Poll Flier, SHRM Research, June 2010

Employers Consider Their Health Care Reform Options, SHRM Online Benefits Discipline, June 2010

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