Employers Express Desired Outcome of Supreme Court ACA Ruling

March 26, 2012 (PLANSPONSOR.com) - Employers, particularly larger ones, expect the Supreme Court to uphold the Affordable Care Act (ACA), but strike down the individual mandate, according to a new survey.

Of all employers, 42% hope the ACA is struck down in its entirety, the survey conducted by the Midwest Business Group on Health (MBGH) and co-sponsored by the National Business Coalition on Health (NBCH), Business Insurance and Workforce Management found. 

Employers favor repeal of the following ACA provisions: the excise tax on high cost plans; capping flexible savings account (FSA) contributions; prohibiting using FSA amounts for over the counter drugs with prescriptions; and reporting cash value of benefits on W-2 forms.   

Employers favor retaining the following ACA provisions: removal of co-pays for preventive care; mandating coverage of preventive services; creation of Health Insurance Exchanges; elimination of annual and lifetime limits on essential benefits; and extending coverage to adult children.   

Employers are split on the value of some provisions, including requiring employers who drop coverage to offer vouchers to help people buy insurance; imposing penalties on employers who do not provide health benefits; mandating individuals obtain health insurance; and defining minimum essential benefits.

Costs Not as Bad  

In contrast to what employers indicated in the 2010 survey, many of this year's respondents found complying with the ACA provisions cost them less than anticipated.   

While large employers found the cost impact of the ACA in 2011, including extending coverage to adult children up to age 26, was less than 2%, most small- and mid-sized employers responded that their increases were up to 5%. Many small employers anticipate increases in their health benefit costs over 10% in the future due to the ACA.   

Only 6% of all employers said they were likely to pay the penalty fee and drop health benefits coverage for employees in order to save money. This is down by more than half from the 2010 survey results. Less than 30% of employers that are likely to drop coverage will raise salaries to enable individuals to buy health coverage on their own.   

Of employers offering retiree benefits, 57% said they are likely to continue to offer these benefits.   

The online survey was conducted from February to March 2012. There were approximately 440 respondents from 34 states; 58% representing employers with more than 500 employees and 25% representing employers with 50-500 employees.