Get ready for some changes.
By Dirk Olin
The Patient Protection and Affordable Care Act of 2010 would be a mouthful even if its details did not run to 2,409 pages. Which is ironic. For as massive and nuanced as the historic piece of legislation is, most discussions about it reduce the bill to caricature. In the end, it is altogether likely that both its detractors—decrying inflation and statism, if not socialism—and its proponents—heralding a ShangriLa of social equity—will be proven wrong. The reality is that the measure includes so many provisions and pilot programs that the gods of unanticipated consequences must surely be invoked.
Because of the deep uncertainty surrounding the implementation of reform, and because of its enormous potential for profoundly affecting the ways executives will administer their employee health plans, HRO Today is committing a substantial portion of our editorial resources to coverage of the subject for the foreseeable future. At our recent HRO Summit in Tampa (see page 54 for a pictorial glimpse), David Merritt, vice president of former House Speaker Newt Gingrich’s Center for Health Transformation, provided a predictably negative take on the bill. But he also said that the thrust of the measure was unlikely to be rescinded, notwithstanding a Republican takeover of the House or even, in 2012, a GOP recapture of the Senate.
So the question is neither “how bad?” nor “how good?” is health reform. The question is, “What to do?” With so many proverbial nuts and bolts to turn in the coming years, HR executives would do well to take stock of their health plan toolboxes.
The need for such review would appear to correlate pretty strongly with the size of your operations. While employers are encouraged to offer coverage under the new health care reform rules, they can choose not to and (starting in 2014) pay a penalty that might be less than what they currently spend on health benefits. But, according to a survey released in November by consulting firm Mercer, relatively few large employers seem inclined to take that route. Asked how likely they would be to get out of the business of providing health care once state-run insurance exchanges become operational in 2014 (making it easier for individuals to buy coverage), the great majority answered “not likely.”
Just 6 percent of employers with at least 500 employees said they would probably drop their health plans after the insurance exchanges come online in 2014. More small employers said they’d be likely to drop (20 percent of those with 10 to 499 employees), but if Massachusetts’ three-year experience with exchanges is any guide, few will actually do so. As for cost, the impact of the act in 2011 is estimated at 1 to 2 percent overall, but it ranges from no impact to 5 percent or more for individual employers.
To get a more granular assessment of the employer health benefits landscape, please click here to view the survey that was jointly conducted by SharedXpertise (publisher of HRO Today) and the ADP Research Institute. There, you’ll find more specific predictions by employers about the scope of benefits they expect to provide down the road and assessments of provisions about extended dependent coverage, so-called “Cadillac” plan taxes, and projected compliance costs. Future issues will provide ongoing coverage of the topic, exploring specific challenges and solutions with experts in the field.
If you have suggestions for contributors to our new coverage or angles to pursue, please e-mail me at email@example.com.
As we move deeper into the turns of this policy wheel, we’ll be publishing a fuller analysis of our own survey findings. But two things are already certain. One, you’ll be making some of your decisions with incomplete knowledge that will require adjustments down the road. Two, doing nothing is not an option.