SURVEY SAYS: ACA’s Effect on Competitive Benefits

We covered a survey last week that found two-thirds of small business owners think the Patient Protection and Affordable Care Act (ACA) will make it harder to offer competitive benefits.

I asked NewsDash readers, has the ACA affected the attractiveness of your health benefits to employees? And, have you enhanced other benefit offerings as a result?

More than 80% of respondents worked in a plan sponsor role, while about 3% each worked in an adviser/consultant, TPA/recordkeeper/investment manager or attorney role. We also had responses from a federal auditor, benefits representatives, and a paralegal.

More than one-quarter of respondents each were from firms with 51 to 100 employees and firms with 1,000 to 5,000 employees. Sixteen percent each were from firms with one to 50 employees, 501 to 1,000 employees, and more than 5,000 employees.

Fifty-five percent of responding readers indicated their companies have changed health benefits due to the ACA, and 45% said they haven’t. Thirteen percent reported they are planning to change health benefits in 2015 due to the ACA, 77% are not and the rest do not know.

More than half (51.6%) of respondents do not think employees find their companies’ health benefits less attractive since the ACA was implemented, while 45.2% do think employees find health benefits less attractive. The remaining respondents said they do not know.

When asked which enhancements to other benefits, if any, their companies made specifically in response to the effect of the ACA on health benefits, the vast majority (86.7%) reported none. However, 6.7% indicated they increased employer contributions to their retirement plans, and the same percentage added new voluntary benefits, such as commuter benefits, pet insurance, child care subsidy, etc. Slightly more than 3% said they added or enhanced vision or dental benefits, and “other” responses included offering a wider array of health plans from which to choose.

Among respondents who chose to leave comments, the sentiment about the ACA’s effect on benefits offerings was mostly negative. A couple of readers shared ideas or strategies. No Editor’s Choice this week.

A big thank you to all who participated in our survey!


We already had a bad healthcare plan with a huge deductible and 70/30 coverage so ACA didn't affect us at all, except for changing the definition of part-time.

And don't even get me started on the personal "Shared Responsibility" crap! Still fuming...

Even though ACA hasn't affected our benefits yet, the Cadillac tax could have a huge impact! We have 78% of our employees contributing to an HSA, and if the law stays as it is, they will most likely be penalized and not allowed to contribute the full amount. The IRS wants their money one way or another!

Overall, ACA has had limited impact on our benefits. Deductibles and out of pocket maximums have gone up, but those were steadily increasing prior to ACA. We added a 3rd medical option and refined, but did not substantially change, our employer/employee cost sharing methodology. Overall, our employees are quite satisfied with their health benefits.

Negative result. Premiums went up and we had to increase the employee's portion of the premium on all levels. They are not happy. The company simply does not have the financial resources to absorb any more expenses.

Congress had the most effect on benefits, not ACA.

Due to continually rising costs of healthcare premiums, our company has had to cut other benefits including HSA contributions, dental benefits and retirement contributions. In addition to higher premiums, employees have to face higher deductibles, higher copays, and higher total out of pocket costs.

Substantially reduced health care coverage, increased out of pocket expenses for participant due to avoidance of upcoming Cadillac tax.

We have a rolling 3-year strategy with respect to our benefits offerings. The strategy is built around our company's culture and strategies, keeping in mind compliance with ACA. When we hire associates from other companies, they often comment on the attractiveness of our benefits offerings. We want our plans to be competitive but they don't have to be "best in class."

We were able to keep our current plan and not go to the "medal" plans which would greatly impact our employees. Hopefully we can stay with the plan in 2016, too.

Verbatim (cont.)

The change to the flexible spending accounts, taking away coverage over the counter drugs and supplies unfortunately makes it less attractive.

Our health benefits were previously considered to be a major advantage in recruiting, retention and employee engagement. The ACA was a major factor in eliminating that advantage.

How could it not be more attractive? Preventive services are "free" because there are no copays. Oh wait a minute - premiums increased. I wonder why?

They make it so hard these days to exploit workers that I don't even know why we bother anymore.

As different mandates increase the cost of health insurance, our only option is to shift the risk and adjust cost sharing. Not a fun thing to do.

Zip, zero, nada - except for those who, as a result of too many newly eligible, will now never work 1,000 hours.

ACA requirement of generic maintenance drugs at 100% (i.e., birth control, etc.,) and the inclusion of co-pays as part of max out-of-pocket improved the value of our coverage to employees.

Administrative costs - due to the new regulations have increased not only our costs, but participant costs. We have added new, limited-service providers in an attempt to reduce employee costs. We hope Obama takes his plan with him when he leaves - which can't be soon enough.

The company has always been concerned for the cost to the employee. Offering wider choice - metallic plans - and moving to a set subsidy at different wage bands can be advantageous to the employees.

ACA appears to be driving up the cost of healthcare, as well as taxes for all. Net negative!


NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Asset International or its affiliates.