Benefits

I See Your Health Reform Study and Raise You Two

The White House felt it proper to refute McKinsey Co.’s health reform study (see yesterday’s post) finding that as many as 30 percent of employers will stop offering health insurance to their workers after reform takes full force in 2014. Deputy Chief of Staff Nancy-Anne DeParle cited three studies saying employers would continue covering workers unabated.

The Rand Corporation: “The percentage of employees offered insurance will not change substantially, but a small number of employees in small firms (defined as those with under 100 employees in 2016) will obtain employer-sponsored insurance through the state insurance exchanges.”

The Urban Institute: “Some have argued that the Patient Protection and Affordable Care Act would erode employer-sponsored insurance (ESI) by providing incentives for employers to stop offering coverage. Others have claimed that most businesses would face increased costs as a result of reform. A new study finds that overall ESI coverage under the ACA would not differ significantly from what coverage would be without reform.”

Mercer: “In a survey released today by consulting firm Mercer, employers were asked how likely they are to get out of the business of providing health care once state-run insurance exchanges become operational in 2014 and make it easier for individuals to buy coverage. For the great majority, the answer was ‘not likely.’”

Executives from third-party administrators I spoke to this week also said health care reform will not drive companies out of the business of providing health care, and that health benefits are still the second most important recruitment and retention tool after salary. They downplayed the disruptive impact of 2010’s raft of insurance mandates on self-funded plans. But they said the medical-loss-ratio and unreasonable-rate increase rules would cause major premium increases for fully insured plans. All of which points to increased self-funding, they said.