Most Employers Waiting to Make Dependent Health Coverage Changes

June 18, 2010 ( – Most employers responding to a recent survey said they have no plans to extend coverage to dependents up to age 26 until they are required to by the new health care reform law.

A news release from the International Foundation of Employee Benefit Plans (IFEBP) about its survey report, Health Care Reform: What Employers Are Considering, said 67% of respondents aren’t going to jump ahead of the law, while 20% say they are taking immediate action to comply.

Meanwhile, according to IFEBP, 42% plan to extend dental plan coverage to adult children to match their medical plan requirements, and 32% plan to extend vision benefits to adult children.

Three-quarters (75%) identify extending coverage to adult children until age 26 as the major reform requirement impacting plan costs.

“Both large and small employers are carefully scrutinizing their options,” said Sally Natchek, Senior Director of Research at the International Foundation, in thenews release. “Employers at this point are reacting to the first wave of requirements, knowing they need to make some initial immediate decisions. They are also looking at the next few years and how the timeline of regulations will impact their organizations. In the midst of a host of health care reform challenges, employers remain confident that they will continue to offer health care benefits to their active employees.”

According to IFEBP, other survey findings included:

  • 52% of employers who currently offer medical benefits to retirees plan to take advantage of the one-time federal reinsurance program established by health care reform legislation.
  • 87% of employers agree that their organizations will continue to offer health care benefits because they are critical to employee recruitment, retention and remaining competitive.
  • Of employers whose plans currently include lifetime maximum provisions on essential benefits, only 4% are removing lifetime maximums before they are required to do so, 86% are not making changes until required, and 10% are not sure. Likewise, 4% of employers offering plans with annual maximums are removing them before they are legally required.
  • 21% are planning to add or increase emphasis on high-deductible health plans in the next 12 months. Close to 70% of these employers are likely to focus on account-based plans linked to health savings accounts.
  • 48% are focusing on redesigning their health plans so that by 2018, their plans will avoid triggering the excise “Cadillac” tax for high-value plans.
  • 66% of employers agree that their organizations will take advantage of the new provision that will offer increased levels of financial incentives available to employees who participate in employer-provided wellness programs.
  • Employers are planning to educate their employees on the new legislation through e-mails to participants (51%), special written communication pieces (49%), and their organization’s Web site (42%).
  • 80% have lifetime benefit caps; 4.4% of plans are removing them before being required to, while 85.6% aren’t doing so until they have to.
  • Half have pre-existing condition exclusions;  4.5% are stripping them out before being required to, while 81.2% will only do so when they have to under the law.

The survey results include responses from 1,021 individuals representing single employer plans. Companies ranged in size from small employers with fewer than 500 employees to large companies with more than 20,000 employees.

To order the survey report visit or contact the Foundation Bookstore at or (888) 334-3327, option 4.