Following the U.S. Supreme Court decision on health care reform, most employers—some 88 percent—remain committed to offer health care benefits to their active employees for the foreseeable future, according to a Towers Watson survey.
"The 2012 Towers Watson Health Care Changes Ahead" survey was completed by 440 employers in July 2012 and reflects respondents 2013 to 2015 health care benefit decisions.
This strong commitment (up 17 percentage points from 2011) comes despite a projected 2013 per employee health care cost of $11,507, an increase of 5.3 percent from 2012. It also comes amid uncertainty relating to the November elections, development of insurance exchanges and the rapidly evolving health care delivery system, says Ron Fontanetta, Senior Healthcare Consulting Leader at Towers Watson.
"While the most significant changes mandated by health care reform will not occur until 2014, it is essential that companies develop a strategic response and prepare for these changes well in advance of then," Fontanetta says. "These changes will have a profound impact on the way health care is delivered and how many individuals acquire health insurance, most notably retirees."
Although the rate of health care cost increases has slowed (5.3 percent projected for 2013 compared with an expected 5.9 percent in 2012), a majority of employers expect they will trigger the health care reform excise tax in 2018 if they do not make changes to their current benefit strategy. As a result, some 83 percent of employers are planning to take steps to control their costs to avoid the tax.
Those steps include: changing plan options (63 percent), significantly reducing subsidization of coverage for spouses and dependents (38 percent), and using spousal waivers or surcharges (29 percent).
Additionally, some employers will pass along a greater percentage of costs to employees with 42 percent saying they will increase employees' share by one to five percentage points while fewer indicate they will increase employee costs by five percentage points or more (13 percent), says Randall Abbott, Senior Healthcare Consulting Leader at Towers Watson.
"Affordable healthcare remains a top priority for employers, but due to the increasing costs of medical benefits and the additional burden of compliance, business leaders need to keep the pressure on to control costs, increase workforce accountability and engage workers to lead a healthier lifestyle."
Other survey findings include:
- More than three-quarters (77 percent) view health care benefits as core to their employee value proposition over the next several years, and more than one-third of companies will examine their health care benefits in a total rewards framework by 2013.
- Healthcare delivery continues to evolve. Seventeen percent plan to offer telemedicine by 2013, and another 27 percent are considering offering it by 2015.
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