What Will Employers Do?

Many believe that employer behavior over the next few years will be what makes or breaks health reform. Over the last few years, with the economic downturn many employers have reduced or dropped coverage. PPACA and its underlying financial assumptions are built on the premise that employers will keep being the primary providers of private health insurance benefits in this country during the years to come. But expert opinions vary widely about how the new law will impact group coverage when fully implemented in 2014.

Several surveys, studies and articles released this past week give a bit of a clue as to what employers are thinking when it comes to health reform and providing benefits to employees. For instance, this past week, a Gallup survey showed that of all groups of American voters, business owners who make our country’s hiring and benefit decisions are the most disproving of President Obama and his policies. Ironically, their highly paid professional employees are the group most pleased with the President.

Those same employers are trying hard to manage their health care costs right now. A new study by America’s Health Insurance Plans (AHIP) shows employers are increasingly likely to select consumer-directed plans as part of their employee benefit offerings, even though these same plans could be limited in the future by impending PPACA insurance market reforms. Meanwhile, some employers are trying to use PPACA benefits to their cost-advantage in perhaps an unintended way. Kaiser Health News reports this week that some employers are incenting their younger employees to stay on their parent’s employer-provided plans as long as possible as a means of reducing their own healthcare costs.

It seems like an uncertain future is just too much for some employers to handle. The headline from a Deloitte survey out this week shows that one in ten companies plan to drop coverage. But that’s not all the study revealed. Most employers say their company is “not well prepared” to implement the 2014 provisions of PPACA.  And while 30% think PPACA is “a good start,” 59% see it as “a step in the wrong direction.” Showing corresponding data with the Gallup poll referenced above, there was a wide range of opinions reported, from Human Resources who responded more positively to executive-level respondents who think it’s a step in the wrong direction.

Perhaps a reason why is that, despite a lot of rhetoric, neither Republicans nor Democrats have done much to make health reform an easier pill for employers to swallow during the 111th Congress. Yes, there are some House-passed measures to make things easier for businesses stacked up that the Democratically-controlled Senate won’t consider. But most of them aren’t health reform-related, and other than the out-and-out repeal bills, not too much health reform legislation is moving through the House. There are a number of business-friendly health reform measures with widespread, and even bipartisan support, including straight repeal bills.  Most haven’t even been allowed by the GOP leadership to make it through the committee process, let alone be voted upon on the floor. These would include, among others, H.R. 1744, which would repeal the employer mandate, H.R. 605, 369 and 2010, all of which would improve group access to consumer-directed health insurance options in the future, H.R. 436 to repeal the medical device tax, and H.R. 1206 to fix the MLR requirements for agents and brokers and H.R. 2077 to completely repeal them. It goes without saying, nothing to make it easier for businesses to deal with health reform is currently moving through the Democratically-controlled Senate either.

Bottom line, policymakers on both sides of the aisle need to get a lot more business friendly if they want to fix our economy, reduce costs, and keep employer dollars in our healthcare system in the years ahead. Perhaps our nation’s employers need to more clearly articulate the need for change. Some analysts believe they’re the key to breaking the gridlock in Washington.

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