Employer Health Care Coverage to Remain After ACA

December 6, 2012 (PLANSPONSOR.com) – Most organizations said they will continue providing employer-sponsored health insurance when the Affordable Care Act (ACA) exchanges open in 2014.

According to the International Foundation of Employee Benefit Plans’ 2012 Post-Election Survey, 84% of employers will provide insurance for full-time employees after the ACA.

“With President Obama’s re-election confirming that the ACA will survive, we saw a 7% increase in organizations planning on providing health care benefits from when we asked our members following the Supreme Court’s ruling in June (77%),” said Michael Wilson, International Foundation CEO. “This research showed that 1% are saying they definitely won’t, a bit lower than we saw in June.”

The top reasons Foundation members plan to provide coverage in 2014 are to maintain/increase employee satisfaction and loyalty (40%); to retain current employees (24%); or it is part of a collective bargaining agreement (21%).

With nearly three-quarters of the respondents from June’s post-Supreme Court Decision Survey stating that they were in a “wait and see” mode in terms of health care planning until after the presidential and congressional elections, 59% stated that their organizations are now confident in moving beyond that approach. Seventy-seven percent stated they are well along in terms of keeping current with ACA provisions, with 60% stating that they are either very or extremely far along in terms of preparing for future ACA provisions.

Aside from organizations’ health care focus shifting to complying with legislation (57%), most are shifting their attention to wellness (52%), Value-Based Health Care (40%) and consumer-driven health plans (26%).

When the exchanges are put into effect in 2014, 25% of the respondents are likely to direct only some employees to the exchanges while continuing to provide coverage for others as opposed to dropping coverage for all employees.

“One can assume that the 63% of organizations that will most likely provide a subsidy to those employees that were shifted to the exchanges are sensitive to promoting employee loyalty,” said Julie Stich, the International Foundation’s director of research.

Employers for the most part are not dramatically adjusting their hiring plans for the next two years based on the ACA. Nearly half (48%) plan to add or reduce the work force; 11% will reduce the work force because of overall costs directly associated with the ACA; 5% will reduce hiring to stay under the 50-employee ACA threshold; and just 4% will add staff to help keep their health care plan compliant with the ACA.

The 2012 Post-Election Survey was administered December 3 and 4, with responses received from 593 plan administrators, trustees and organizational representatives.