National Survey Released on Employers’ Reaction to Health Reform
Keeping employees healthy is seen as key to managing health care costs
Cary Conway, MBGH Media Contact
CHICAGO – The Midwest Business Group on Health (MBGH) released the results of its recent survey of more than 1,300 employers that gauged their reactions to the impending impact of the new health reform law. Conducted in partnership with Business Insurance, the research findings will help educate and inform employers about areas of most concern. The results** found that 78% of employers agree or somewhat agree that the potential costs of the health care reform law are making it more important than ever that employers keep their workers healthy and motivated to adopt healthy lifestyles. Additionally, 60% of employers are likely or very likely to create or expand their wellness programs as a result of the incentive wellness provision in the new law.
“As we talk to large employers about health reform, we find a consistent level of uncertainty in what to do due to the lack of clarity in the new law,” said Larry Boress, president and CEO, MBGH. “However, it’s clear that keeping workers healthy has become more than ‘lunch and learn programs.’ In fact, employers are already implementing strategic health management approaches and these are quickly evolving into viable cost reduction strategies.”
Business Insurance Editor Regis Coccia commented, “For employers to better understand the impact of this landmark law, it’s important for stakeholders to collect and share information on what benefit plan sponsors are thinking will help employers struggling to understand the reform provisions. The increased focus on wellness programs by employers is an important finding of the survey and demonstrates that cost control remains a key concern. It will take time for employers to understand the full impact of the law, but a commitment to expanding wellness efforts is an encouraging sign.”
Additional research findings:
- Fifty-four percent of employers do not plan to drop health care coverage which would result in a penalty of $2,000 per employee fine as stipulated under the law. However, 18% said it is likely or very likely that they would consider dropping benefits altogether.
- Employers were split 50/50 as to whether they are likely to charge more for dependents as a result of a provision that extends coverage to adult children up to age 26.
- There will be a new law requirement for employers to extend health care coverage to employees who work 30 or more hours a week or face penalties. Seventy-four percent of employers responded that they were not very likely to reduce the number of employees working 30 to 40 hours a week.
- Fifty-five percent agreed that employees will have more out-of-pocket costs or reduce their health care usage due to a $2,500 cap on employees’ annual contributions to flexible spending accounts that goes into effect in 2013. There is no limit today, but employers typically impose limits between $4,000 and $5,000. Twenty-eight percent said the provision is not very likely to cause employees to spend more, while 17% did not answer.
- Employers realize the importance of communicating information to employees with 52% indicating that they will be educating employees about how the law affects their benefits. Conversely, 38% of the employers surveyed said they haven't decided what to communicate to employees, and 6% said they don't plan to inform employees about the law.
“At Navistar we are well aware that the health and well being of our employees will directly impact our future success,” said Dan Pikelny, director, Health and Productivity, Navistar, Inc. “We focus on a three-pronged prevention strategy to improve employee health and productivity. Primary programs focus on wellness for our healthy employees; secondary programs concentrate on those employees who are at risk; and tertiary programs consist of disease- and case-management.
** Summary of Key Findings
Next steps
MBGH and Business Insurance plan to conduct an additional survey at the end of the year to track employer changes in their views and programs.
About Business Insurance
Business Insurance is a Chicago-based publication of Crain Communications Inc. that delivers news and information on employee benefits, risk management and commercial insurance weekly in a printed magazine, daily online and through select live events. For more than 43 years, Business Insurance has been the trusted voice of the risk and benefits management marketplace. For more information, please visit their website.
About the Midwest Business Group on Health
Celebrating 30 years of advancing value in health benefits management, the non-profit Midwest Business Group on Health (MBGH) is one of the nation's leading business groups of private and public employers. MBGH's more than 100 members represent over 3 million lives, spending more than $3 billion on health care benefits annually. MBGH member benefits include health benefit education seminars, networking opportunities, research, demonstration projects and community initiatives. MBGH is a founding member of the National Business Coalition on Health.
Note to editors: The full research findings are available to media upon request. Contact Larry Boress via email or at 312-372-9090 x101.