Employers Admit to Waiting for the Health Care Decision

July 9, 2012 (PLANSPONSOR.com) - The majority of employers surveyed said they had been waiting for the Supreme Court’s decision before developing a strategy to respond to the health reform law’s provisions slated to go into effect in 2014 and beyond.

Immediately following the U.S. Supreme Court’s landmark decision upholding the health care reform law’s individual mandate (see “Supreme Court Finds PPACA Individual Mandate Constitutional”), Mercer polled more than 4,000 employers. While 40% said they will begin taking action now that the court has ruled, another 16% said they will continue to wait until after the November elections.  

When asked whether they agreed or disagreed with the statement, “[The reform law] has provided the impetus for our organization to pursue more aggressive health benefit cost-management strategies,” more than half – 52% – agreed.   

Survey results suggest this trend will continue. Asked whether they planned to be more aggressive about managing plan costs going forward now that health care reform has been confirmed, 54% said yes. And while 41% said no, it’s only because they were already taking aggressive action to manage expenses.  

Although the law still faces a contentious political outlook, employers should stay on track in their efforts to comply with the law as enacted or else they may face penalties, advises Mercer. 

Employers must act quickly to implement new requirements for 2012 and 2013, such as providing benefit summary disclosures, complying with new dollar limits on health care flexible spending arrangements, and increasing Medicare withholding for high earners. But the rules going into effect in 2014 that are aimed at expanding access will have broader implications for many employers.   

More than a fourth of survey respondents (28%) said that compliance with the new requirement that employees working an average of 30 or more hours per week must be eligible for coverage will present a “significant challenge” for their organization.  

The requirement to auto-enroll newly eligible employees in a health plan – which means that employees will automatically be covered unless they take action to opt-out – is also expected to increase the rolls of the insured for many employers. Nearly one-third (29%) of respondents to the Mercer survey said this will be a significant challenge, especially because other provisions of the law will limit the amount of health plan costs employers can pass along to employees through higher premiums or deductibles.  

Still, the provision that has the most employers worried – 47% of survey respondents – is the excise tax on high-cost plans, expected to go into effect in 2018.