Faced with mounting health care bills of their own, a third of companies in 2002 increased their employees’ copayments and coinsurance, 31% hiked up the workers’ share of premiums and a quarter raised the deductibles of their company-sponsored health care plans. For 33% of the 453 companies polled by the Commonwealth Fund, the steps were more drastic, 18% eliminated or placed limits on the benefits offered to employees and 15% offset premium increases with reduced wage increases to the workforce.
Most companies are now turning to limiting eligibility to further reduce costs. More than have (58%) of the companies examined for the Job-Based Health Insurance in the Balance: Employer Views of Coverage in the Workplace study have a waiting period before new employees become eligible for coverage. Of those with a waiting period, 54% require new hires to be on board three months or longer before health care eligibility kicks in. Additionally, 54% of firms require full time employment to be eligible for the company health plan.
All of this is old hat for most plan sponsors who not only have seen countless studies pointing to rising health care costs and increased cost shifting, but also see it in real time in their own corporate health plans. However, little is known about the employer’s perspective on various plans to assist employers through the time of cost shifting and rising costs. Overall, the majority of companies (59%) believe corporations should be responsible for sharing the costs of their employees’ health benefits. Support was found to be widespread on the issue, with larger groups of supports coming from large firms (67%) – those with 100 or more employees – and employees that already offer coverage (63%). On the other end of the spectrum, strong levels of support were found among small firms (54%) – those with less than 100 workers – and surprisingly among 41% of companies that do not currently offer health care coverage.
This comes as little surprise when measured against employer views of health insurance as part of the total compensation and benefits package. Three-quarters (76%) of the top management of the companies offering health care coverage said it is very or somewhat important in recruiting efforts of their firms. Further firms that offer such programs notice improvements in the overall well being of their workforce. Of the group that offered health insurance, 67% said the plans improve employee health, 60% said it improves employee morale and 39% note an increase in employee productivity.
To this, the Commonwealth Fund found companies willing to, or at least consider, assisting employees with programs such as tax credits and alternatives to employer coverage. The vast majority of employers (83%) said they were very or somewhat willing to reduce an eligible employee’s withholding tax by the amount of a tax credit that would be offered to employees to reduce the cost of employer-based premiums. Further, 77% said they would be very or somewhat willing to collect a tax credit and apply it to an employee’s share of their health insurance premium. More support was found for tax credits and federal premium assistance for employee COBRA plans. Again, the majority of companies (53%) said they support for allowing unemployed workers to use tax credits to offset the costs of COBRA.
Among all companies support was great for a program in which employees and dependents would be able to buy coverage through a federal or state employee benefit plan, with part of the premiums paid by the employer. Sixty-one percent of the sample pool said they would be very or somewhat interested in such a program. Along company size lines, there was more interest among small employers (66%) than large (54%) and significant interest in the companies not currently offering health coverage to their staff (57%).
The study canvassed a total 453 companies. Of the total, 18% did not offer health insurance, and 62% were small firms. A copy of the full report can be found at http://www.cmwf.org/programs/insurance/collins_job-basedinbalance_ib_718.pdf.