Most employers still plan to offer health coverage after reforms take effectPosted On: Feb. 10, 2013 12:00 AM CST
Despite increased costs and opposition to the health care reform law, the overwhelming majority of employers intend to keep providing health care coverage for their employees, according to a Business Insurance survey.
Eighty-two percent of respondents said they will continue to offer coverage in 2014, the first year that public health insurance exchanges will be available for individuals to purchase coverage.
Just 17% of respondents said they will explore terminating coverage and increasing employees' salaries to help offset premiums employees would pay to buy coverage in exchanges.
Just 1% said they would terminate coverage.
Competition for needed employees is the top reason employers said they will continue offering coverage after exchanges start operating, with 63% saying they have to continue to sponsor plans to remain competitive.
In addition, 25% said they thought it is their obligation as employers to provide coverage to their workforces, while 5% said the cost of eliminating coverage would exceed the costs of continuing it.
Those costs would include a nontax-deductible $2,000 penalty for every full-time employee not offered coverage, plus the cost of boosting employees' salaries to offset premiums the employees would pay for those employers that decide to do so.
The passage of time, though, has not lessened employer opposition to the Patient Protection and Affordable Care Act. In fact, 62% of respondents said employer opposition to the reform law has increased in the past two years.
Sixty-one percent of employers expect the law to increase their health insurance costs over the next five years.
When asked if there is one health care reform law provision they hope Congress repeals, nearly one-third of respondents backed repeal of the penalty on employers that do not offer coverage or offer coverage that flunks a health care reform set affordability test. Under that test, employers are liable for a $3,000 penalty for each full-time employee whose premium payment for single coverage exceeds 9.5% of household income.
In addition, 29% of employers said No. 1 on their list of provisions for Congress to repeal is a $2,500 annual cap on employee contributions to health care flexible spending accounts that went into effect Jan. 1.
The survey, which was conducted for Business Insurance in December by Signet Research Inc., is based on the responses of 343 employers.