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Employer health care reform strategies shifting

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Posted October 25, 2011 by George Lane at 09:31AM. Comments (21)

Mercer recently surveyed employers about their responses to health reform provisions that were effective in 2011 and their attitudes toward requirements that won’t kick in until 2014 or later. The area that provided the most intriguing results involved eligibility. A year ago, when asked what actions they were likely to take in 2014 when benefits must be made available to employees working 30 or more hours per week, employers seemed more inclined to bite the bullet and provide benefits to all their employees with hours above that threshold than to reduce the number of hours that employees worked to avoid hitting the threshold.

What a difference a year makes.

When asked this same question this past summer, twice as many employers said they would change workforce strategy so that fewer employees work 30 or more hours per week as said they would bite the bullet and extend coverage to more employees — 50% and 25%, respectively. The samples taken in both surveys were not identical, but the differences are significant, nonetheless.

There are probably a number of factors causing this shift. Employers have seen roughly a 2% increase in enrollment due to dependent eligibility changes last year and anticipate another 2% increase once auto-enrollment kicks in. These are just additional costs on top of the normal rise in health care expense, which continues to outpace both inflation and wage increases. The economy is still anemic, as is the jobs market, so attraction and retention may not be exactly what’s keeping the C-suite up at night.

There’s still a lot of time between now and 2014.  Next year could be pivotal, with an anticipated date for health reform to visit the Supreme Court in March and a national election in November. Once the dust settles from all that, we should all have a much clearer idea about what really is looming in 2014. It will certainly be interesting to see where employer attitudes are then.

After all, one year can make quite a difference.

Lane is principal at Mercer in Washington, DC. He can be reached at george.lane@mercer.com or 202-331-5222.

 

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