Even If Repealed, Employers Would Keep Some ACA Provisions

A new report from the International Foundation of Employee Benefit Plans (IFEBP) finds that if the Patient Protection and Affordable Care Act (ACA) is repealed, 78% of employers would keep in place at least some of the provisions they have already implemented in their health plans.

Employers also report a wide-range of provisions they would like to see reinstated in new legislation if the ACA is repealed, with the top being elimination of preexisting condition exclusions (38%), coverage of adult children to age 26 (31%) and increased wellness incentives (31%). A majority of employers predict a new health care reform bill being passed within the next four years if ACA is repealed.

“Employers have seen certain ACA provisions have a positive impact on their workforce,” explains Julie Stich, CEBS, research director at IFEBP. “Mandates such as the elimination of preexisting condition exclusions and coverage of children until age 26 have allowed employees and their families to receive health care services that have made a positive impact on their physical, financial and emotional well-being.”

The report, “2016 Employer-Sponsored Health Care: ACA’s Impact,” found that employers have made a number of changes to curb rising costs due to ACA, including increasing out-of-pocket limits (37%), in-network deductibles (34%) or employees’ share of premium costs (31%). Employers have also increased copayments or coinsurance for primary care (28%), increased employees’ share of prescription drug costs (25%) and increased the employee’s share of dependent coverage cost (24%). One in ten employers has adopted a full-replacement high-deductible health plan (HDHP) because of ACA.

Looking ahead, 28% of employers are currently working on changes to avoid the ACA’s excise tax on high-cost plans (Cadillac tax), and an additional 38% plan to do so before the tax takes effect in 2020. Just 2% of employers report they plan to pay the tax.

The most common actions taken or planned to avoid the tax include moving to an HDHP (43%), shifting costs to employees (42%), dropping higher-cost plans (31%) or reducing benefits (30%). Of respondents taking these actions, 68% report they are somewhat or very unlikely to undo these plan changes if the Cadillac tax is repealed. 

Employers report their biggest ACA challenge and second biggest cost-driver for 2016 is reporting and disclosure. General ACA administrative costs are noted as the biggest cost-driver for 2016 and respondents expect that to continue in the future.

The report finds that employers remain committed to offering employer-sponsored health care coverage. Looking forward five years, only 3% of employers say it is unlikely they will be offering health care. Employers report they continue offering coverage to attract and retain employees and to increase employee satisfaction.

Survey responses were received from 446 human resources and benefits professionals. The surveyed organizations represent a wide base of U.S. employers from nearly 20 different industries and range in size from fewer than 50 to more than 10,000 employees.