Employers Identify Costs from PPACA

August 14, 2013 (PLANSPONSOR.com) – More than two-thirds of employers (69%) providing health benefits have analyzed how the Patient Protection and Affordable Care Act (PPACA) will affect their health care plan costs.

A survey from the International Foundation of Employee Benefits Plans (IFEBP), “ACA’s Cost Impact: Employer-Sponsored Health Plans,” found that of those who conducted a cost analysis, half (50.2%) were able to pinpoint the cost change in 2013 due to the health reform law.

About one in seven (14%) organizations with knowledge of their cost trends, report no change or a decrease in costs for 2013 due to the PPACA. Very few medium and large employers with knowledge of their cost trends are experiencing cost increases beyond 5%, but a considerable portion of smaller employers are experiencing 2013 cost increases beyond 15%.

    Employers identified the top three PPACA provisions impacting 2013 health benefit costs as the Patient-Centered Outcomes Research Institute (PCORI) fee (38%), general PPACA administrative costs (35%) and explaining PPACA provisions to participants (28%). Future provisions that will most increase costs were identified as the 2014 transitional reinsurance fee (18%) and the cost of providing health insurance to individuals who previously were not offered coverage in order to comply with coverage requirements (13%).

    The most common ways employers plan to deal with increased costs due to the PPACA are shifting costs to employees (53%) and encouraging participant health by increasing wellness and value-based health care initiatives (36%).

    Participants in the survey were single employer plans (including corporations) in the databases of the International Foundation and the International Society of Certified Employee Benefit Specialists (ISCEBS). Survey responses were received from 728 human resources and benefits professionals, and other industry experts. Those surveyed represent a wide base of U.S. employers from nearly 20 different industries. Insurance and related fields (24%), manufacturing and distribution (12.6%) and health care and medicine (12.4%) are most represented. The organizations range in size from fewer than 50 employees to more than 10,000.

    A copy of the survey can be found here.