Few Employers Eliminating Health Care Coverage for 2015, SHRM-EBRI Survey Shows

Wellness rewards and penalties most common change; HR professionals expect PPO plans to set off excise tax in 2018

Nov 19, 2014
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ALEXANDRIA, Va. — Employers continue to adjust to increasing health care costs and the Affordable Care Act, but a new survey from the Society for Human Resource Management (SHRM) and the Employee Benefit Research Institute (EBRI) has found that most organizations are not eliminating health care coverage for their employees in 2015.

Just 1 percent of organizations reported planning to eliminate health care coverage, according to the Health Benefits Survey, which was released today by SHRM's Benchmarking Research and EBRI.

"We know from other SHRM research that health care benefits are a valuable employee recruiting tool," said Andrew Mariotti, senior researcher at SHRM. "Given the competitive nature of finding skilled workers, human resource professionals view health care as an important element of a strategic benefits package."

The survey also showed that many human resource professionals are looking ahead to 2018, when an employer tax on high-cost health plans goes into effect. This excise tax of 40 percent will apply to the value of health care benefits that exceeds certain thresholds.

Eighty-five percent of respondents did not expect their organizations' health care benefits to trigger the excise tax in 2018. Of the organizations that did, 75 percent expected their preferred provider organization (PPO) plans to do so.

Although almost one-third of respondents (29.4 percent) said they didn't know what actions they would take to avoid the excise tax, very few (3.5 percent) said they would eliminate health care coverage as a result.

Large organizations were more likely to expect their health care plans to prompt the excise tax in 2018, which could account for the changes that some are making to their plans in 2015. They were more likely than small organizations to add a spouse surcharge, eliminate coverage for part-time workers, create tiered networks and add wellness rewards or penalties in 2015.

For all organizations, the addition of wellness rewards or penalties was the most common change to health care plans for 2015, cited by 26.3 percent of all respondents.

All other planned changes to health care plans were cited by significantly fewer respondents:

• Requiring spouses to get coverage through their own employers: 7.9 percent of organizations.

• Implementing a spouse surcharge: 6.7 percent.

• Creating tiered networks: 3.6 percent.

• Moving to the private exchange: 3.2 percent.

• Adopting a value-based insurance design: 2.6 percent.

• Offering an employee subsidy for coverage on the private exchange: 2.6 percent.

• Eliminating coverage for part-time workers: 1.3 percent.

The Health Benefits Survey polled more than 3,300 HR professionals from early February to early April. It has a margin of error of plus or minus 5 percent.

For the full survey, visit http://www.shrm.org/research/surveyfindings/articles/pages/shrm-ebri-health-benefits.aspx.

Media: For more information or to request an interview, contact Kate Kennedy of SHRM Public Affairs at 703-535-6260 and Kate.Kennedy@shrm.org or Stephen Blakely of EBRI at 202-775-6341 and blakely@ebri.org.

About the Society for Human Resource Management

Founded in 1948, the Society for Human Resource Management (SHRM) is the world’s largest HR membership organization devoted to human resource management. Representing more than 275,000 members in over 160 countries, the Society is the leading provider of resources to serve the needs of HR professionals and advance the professional practice of human resource management. SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. Visit us at shrm.org and follow us on Twitter @SHRMPress.

About the Employee Benefit Research Institute

The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in Washington, D.C., that focuses on health, savings, retirement, and economic security issues. EBRI does not lobby and does not take policy positions. The work of EBRI is made possible by funding from its members and sponsors, which include a broad range of public, private, for-profit and nonprofit organizations. For more information go to www.ebri.org or www.asec.org.

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