Source: hr3590.com
In response to health reform, some employers may stop offering health coverage and opt instead to pay a fine, give workers a raise and send them to state-run health insurance exchanges. Compensating for that , the individual mandate may drive about 4 million workers into employer plans, according to research from various sources compiled by the U.S. Government Accountability Office.
Five statistical studies (microsimulations), 19 employer surveys and three mixed studies were included by GAO in its new overview of predictions about how employer plans will react to health reform.
The research was unanimous in saying that reform will: (1) have a more dramatic effect on small employers; and (2) prompt employers that continue providing coverage to adopt more expensive benefit designs, according to the GAO overview.
Four surveys found that smaller employers were more likely than other employers to stop offering health coverage in response to the health reform law.
Nine surveys also indicated that employers in general predict that their health plans will have to be modified, and will cost more, to include benefits required under health reform.
The list of factors impacting employer decisions to cover employees includes:
- the individual mandate;
- insurance market reforms, which will make coverage “richer” and more expensive; and
- penalties for large employers that do not offer coverage.
Here are the plan-design responses the employers predicted they would use:
- Greater employee cost sharing: The nine surveys that examined benefit design changes indicated that 16 percent to 73 percent will consider increasing employee cost sharing, for example, through increased premiums, deductibles or copayments.
- Account-based plans: The nine surveys that asked about use of benefit accounts indicated that from 17 percent to 73 percent of employers either planned to use them or saw them as a good idea.
- Self-insurance: Two of the three surveys that examined becoming self-funded as a response to reform indicated that from 12 percent to 52 percent were considering doing so, and the third survey said 13 percent of employers reported increasing their consideration of such a move.
For additional information about health reform, see Thompson’s employee benefits library, including the Employer’s Guide to Self-Insuring Health Benefits.