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Study: 80 percent of employers plan to continue offering health insurance benefits

1 in 10 companies say they will drop coverage

By Lorie Hailey
Associate Editor

A new study released Tuesday reveals that most U.S. employers, 80 percent, plan to continue offering health insurance benefits in the next three years, but changes that shift financial risk to employees are likely.

The Deloitte Center for Health Solutions (DCHS), the health services research arm of the consulting firm Deloitte, conducted a web-based survey of 560 randomly selected employers with 50 or more workers that offering health benefits. Its 32-item questionnaire asked for employers opinions about the Affordable Care Act (ACA), which the Supreme Court upheld as constitutional in June, as well as anticipated strategies for employee health benefits coverage and cost containment.

More than 160 million Americans are covered by employer-sponsored health insurance; 60 percent of all U.S. firms offered health benefits in 2011, according to the Kaiser Family Foundation.

The majority of employers surveyed said they do not intend to drop health benefits coverage. Nine percent of companies representing 3 percent of the workforce anticipate dropping coverage in the next one to three years, versus 81 percent of companies representing 84 percent of the workforce that plan to continue. Ten percent of companies representing 13 percent of the workforce are not sure.

Most employers surveyed said they will increase use of co-pays, deductibles and increased premium participation to reduce healthcare costs.

Other findings:

— Most employers believe they have a good understanding of the new healthcare law, but understanding of delivery system changes in the ACA is low. Familiarity with the individual mandate is the highest (72 perecent). Eemployer penalties for not offering benefits (66 percent), essential benefits (53 percent), and health insurance exchanges (45 percent) were also familiar to many employers. But bundled payments, accountable care and other parts of the law are not understood, Deloitte found.

— Thirty percent of employers view the ACA as “a good start,” while 59 percent called it “a step in the wrong direction.”

— Most employers say their company is “not well prepared” to implement the 2014 provisions of the ACA.

— The majority of those surveyed said they believe the U.S. healthcare system underperforms; 64 percent graded the system with a C, D of F. Eighty percent of employers believe high costs are driven by hospital costs. Inefficiencies and unhealthy lifestyles were also named as cost-drivers.

— Employers believe that health insurance exchanges may be a viable channel for employer benefits strategies. Smaller employers view exchanges more favorably than do bigger companies – particular interest is held in exchanges that offer a wide choice of plans and that operate as a non-profit entity.

— Some employers believe direct contracting with provider organizations will be a viable cost containment strategy.

— Most employers support reforms in medical liability, Medicare and Medicaid, and repeal/delay of the ACA as means of reducing the federal deficit. Across the board cuts in government spending are considered a higher priority than changes to the health care system, Deloitte found.

In analyzing the implications of the data, Deloitte said employer-sponsored health benefits are not likely to disappear, but changes that shift the financial risk to employees are certain.

“Therefore, industry and policy-makers should consider the appropriate sets of tools, incentives, and precautions associated with the shift,” the study said.

It also said because employers do not understand the full scope of the ACA, policy-makers and industry leaders should consider investing in education about and active improvement of the ACA. Popular areas where employers are directly impacted are better understood than those that are intended to improve the efficiency and quality of the delivery system.

Read the full study here.