Health Care Ruling Affecting Health Benefits Strategies

Although the rate of health care cost increases has slowed (5.3% projected for 2013 compared with an expected 5.9% this year), a majority of employers (58%) expect they will trigger the health care reform excise tax in 2018 if they do not make changes to their current benefit strategy. As a result, 83% of employers are planning to take steps to control their costs to avoid the tax.   

Nearly three-quarters of employers (72%) state they lack confidence that the exchanges will provide a viable alternative for active employees by 2015, but the story for retirees is very different. Nearly six out of 10 companies with a program are somewhat to very likely to discontinue retiree medical plan sponsorship for post-65 retirees, with 64% considering the same for pre-65 retirees.   

Other findings from the survey include: 

• More than three-quarters of respondents (77%) view health care benefits as core to their employee value proposition over the next several years, and more than one-third of companies will examine their health care benefits in a total rewards framework by 2013. Another 39% are considering doing so by 2014 or 2015. 
• The strong growth of account-based health plans (ABHPs) is expected to continue. By 2015, 80% of employers plan to offer an ABHP, up from 61% in 2013. The enrollment within ABHPs continues to increase significantly, moving from single-digit numbers in 2006 to an expected 30% for employers offering these plans in 2013. 
• Health care delivery continues to evolve, which is leading to the acceleration in use of telemedicine services. Seventeen percent plan to offer telemedicine by 2013, and another 27% are considering offering it by 2014 or 2015. 

Rebecca Moore
editors@plansponsor.com