Employers Still See Reasons for Offering Health Care Coverage

June 11, 2012 (PLANSPONSOR.com) - Nearly half (46.2%) of surveyed organizations report they definitely will continue to provide health care coverage for all full-time employees in 2014.

An additional two in five (39.3%) are very likely to do so. Only 1% of respondents to the Health Care Reform: 2012 Employer Actions Update survey from the International Foundation for Employee Benefit Plans believe they definitely will not provide coverage to all full-time employees in 2014.  

Among organizations that will definitely continue to provide coverage, respondents overwhelming chose three reasons for maintaining coverage: to retain current employees (55.4%), to attract future talent (55.4%), and to maintain or increase employee satisfaction/loyalty (53.5%).  

Among employers that did not state that they definitely will continue to provide coverage to all full-time employees in 2014, the most likely cause for discontinuing coverage is that providing it is becoming too expensive (cited by 45.1% of respondents). Approximately one-third state the cause for dropping coverage would most likely be that other organizations in their industry or their geographic area are discontinuing coverage (27.5% and 4.8%, respectively).   

Among the respondents that are considering using the exchanges in 2014, more are likely to direct only some employees to the exchanges and continue to provide coverage for others as opposed to dropping coverage for all employees. 

When communicating with employees regarding health care reform, most employers (81.1%) use annual enrollment materials. E-mails sent to employees (34.8%), the company website (24.1%) and special written communication pieces (22.9%) are also popular channels of communication.  

The primary health plan of more than one in three responding organizations (34.3%) is a grandfathered plan. However, almost half of employers with a grandfathered plan (46.9%) anticipate their plan will lose this status in 2014 or sooner.  

Respondents consider the top advantages of being grandfathered to be the exemption from the requirement to provide coverage for preventive care with no cost sharing or annual limits (29.6%), the exemption from implementing the appeals process (29.6%) and the exemption from essential benefits requirements applicable in 2014 (28.9%).  

The complete survey report is at http://www.ifebp.org/pdf/research/EmployerActionSurvey.pdf.