Among the reform elements these companies think will help them control costs, says Webber, are insurance exchanges, accountable care organizations, bundled payments to hospitals, government-funded demonstration projects on innovative payment methods, community health innovation strategies, workplace health promotion, an increased emphasis on prevention, and investments in health information technology. "If implemented right, this could be transformational," Webber says.
Overall, he states, employers believe that the reform legislation will survive with its key elements intact. Those include the individual mandate to buy insurance, the expansion of Medicaid, the state insurance exchanges, and the new federal regulation of health insurance.
Employers are concerned about the "1099 provision" that requires them to do extra paperwork (which the Obama Administration is in favor of repealing). They're also not thrilled about the excise tax on "Cadillac plans" that becomes effective in 2018. And if they have a lot of low-wage workers, notes Webber, they're going to have a real problem when the current federal waivers expire and they have to provide comprehensive insurance that might cost nearly as much as those workers earn.
One solution for these employers, Webber admits, is to send their hourly employees to the insurance exchanges. (This will require these companies to pay a fine, but they'll come out ahead financially.) What Webber worries about is that other employers will do the same: "Maybe we're moving to a system [where] people get a voucher and they find insurance on the exchanges."
Webber doesn't deny that the current tax system incentivizes employers to provide insurance that may be more comprehensive than necessary. But he fears what might happen if employers dumped coverage en masse, uprooting the health insurance system that has prevailed in the U.S. for the past 60 years.
According to a new employer survey from Mercer, only six percent of large employers (with at least 500 employees) plan to drop health coverage after the insurance exchanges come online in 2014. But 20 percent of firms with 10-499 employees do, Mercer finds. Smaller businesses -- which face the steepest cost increases every year -- did not participate in the survey.
Another key finding of the Mercer report is that the ACA is expected to add only 1 to 2 percent to respondents' health costs in 2011. This contradicts reports that some employers expect costs to rise significantly as a result of the reform law.
One area where the ACA will add expense is its requirement that employers cover workers' dependents if they have no other employer-provided insurance. Some employers will require employees who have more dependents to pay more, and some will increase the employees' share of the cost for dependent coverage.
Most employers indicate they will find ways to meet other ACA provisions, such as the requirement that they cover all employees who work at least 30 hours per week. The firms that don't already do this will either open up their full-time employee plan to these workers or change their workforce strategy so that fewer part-time workers put in at least 30 hours a week.
The Mercer survey results do not suggest any incipient revolution by employers against healthcare reform. That, plus Webber's remarks, suggests that companies large and small are preparing for what they regard as inevitable changes in health insurance and the healthcare system.
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