Preparedness for the ACA on an Upswing, but Small Business Lags


By Stephen Miller, CEBS May 21, 2014

With the first round of employer mandates required by the Affordable Care Act (ACA) set to begin in 2015, a new survey finds that employers appear more informed about their companies’ options for providing health insurance.

Sixty-nine percent of U.S. employers report being “very informed” about their options under the ACA in 2014, as compared to only 37 percent in 2013.

The results come by way of an annual survey of employee benefits decision-makers by the nonprofit Transamerica Center for Health Studies. The 2014 survey was conducted in March and April, with the findings report, Pulse Check on Employer Preparedness for the ACA, released in May.

Among small businesses, the survey revealed that only six in 10 (59 percent) of those with fewer than 50 full-time equivalent employees are aware of the new Small Business Health Options Program (SHOP), compared to eight of 10 businesses overall (79 percent).

“This may be an area where more education is needed,” said Hector De La Torre, executive director of the Transamerica Center. “Small businesses with fewer than 50 full-time equivalent employees are currently the only businesses eligible to participate in SHOP, yet four in 10 do not know about it. Businesses of this size employ nearly 34 million workers, according to the Small Business Administration, so it’s a significant gap to address.”

The survey found that most employers (64 percent) plan on taking some action to comply with the ACA, with 19 percent planning to change plan options and 17 percent planning to change insurers.

Other key findings from the study include:

  • Employers are researching alternative options. More than a quarter (29 percent) of employers are researching actions that may avoid the need to comply with some ACA mandates, with 23 percent researching reductions in employees, and 15 percent calculating the cost of paying the tax penalty. Among large businesses with 100-plus employees, 33 percent are researching workforce reductions.

  • Small businesses are less informed than large employers. Just 56 percent of small employers feel very informed on their company’s options for health insurance, compared to 78 percent of large employers.

  • Effect on dependent coverage. 10 percent of companies reported that they plan to eliminate coverage of dependents from their health plans, but 9 percent said they plan to add dependent coverage as a result of the ACA. There is no requirement that employer plans cover spouses and children, but plans that include children must allow them to maintain coverage up to age 26.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter @SHRMsmiller.​

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