International Foundation Survey Examines Financial Impact of ACA on Employers

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Stacy Van Alstyne
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International Foundation Survey Examines Financial Impact of ACA on Employers

Employers analyzing ways to cut costs with implementation only months away

Brookfield, WI August 13, 2013 — A new survey released by the International Foundation of Employee Benefits Plans found that more than two-thirds of employers currently providing health benefits (69%) have analyzed how the Affordable Care Act (ACA) will affect their health care plan costs. Additionally, of those who conducted a cost analysis, half (50.2%) were able to pinpoint the cost change in 2013 due to the ACA.

The results of the survey found that the most common ways that employers plan to deal with increased costs due to ACA are shifting costs to employees (53%) and encouraging participant health by increasing wellness and value-based health care initiatives (36%).

“This push for employee participation in wellness programs is a trend we have been tracking for several years now,” said Julie Stich, Research Director with the International Foundation. “Our 2012 survey on wellness found that seven in 10 U.S. employers currently offer wellness programs as a benefit to employees and with ACA implementation only months away, trends indicate this number will only continue to increase as employers look for ways to rein in costs.”

Key findings from the survey include:

  • About one in seven (14%) organizations with knowledge of their cost trends, report no change or a decrease in costs for 2013 due to ACA. Very few medium and large employers with knowledge of their cost trends are experiencing cost increases beyond 5%, but a considerable portion of smaller employers are experiencing 2013 cost increases beyond 15% due to ACA.
  • Employers identified the top three ACA provisions impacting 2013 health benefit costs as the Patient-Centered Outcomes Research Institute (PCORI) fee (38%), general ACA administrative costs (35%) and explaining ACA provisions to participants (28%).
  • Future provisions that will most increase costs were identified as the 2014 transitional reinsurance fee (18%) and the cost of providing health insurance to individuals who previously were not offered coverage in order to comply with coverage requirements (13%).

The survey is a companion to another recent survey from the Foundation, 2013 Employer-Sponsored Health Care: ACA’s Impact, which covered employer concerns regarding plan design and funding, methods for communicating with employees, grandfathered plan status, reactions to health insurance exchanges and cost management initiatives.

“The time period for organizations to ‘wait and see’ has come and gone. Our survey found that more employers are looking into the direct costs of implementing the ACA, how it will impact their bottom line and ways to cut costs,” Stich said.

Those asked to participate in the survey were single employer plans (including corporations) in the databases of the International Foundation and the International Society of Certified Employee Benefit Specialists (ISCEBS). Survey responses were received from 728 human resources and benefits professionals, and other industry experts. Those surveyed represent a wide base of U.S. employers from nearly 20 different industries. Insurance and related fields (24%), manufacturing and distribution (12.6%), and health care and medicine (12.4%) are most represented. The organizations range in size from fewer than 50 employees to more than 10,000.

To download a copy of the survey, ACA’s Cost Impact: Employer-Sponsored Health Plans, visit www.ifebp.org/ACAcost.

About the International Foundation of Employee Benefit Plans

The International Foundation of Employee Benefit Plans is a nonprofit organization, dedicated to being a leading objective and independent global source of employee benefits and compensation education and information. Total membership includes 33,000 individuals representing multiemployer trust funds, corporations, public employer groups and professional advisory firms throughout the United States and Canada. Each year, the International Foundation offers over 100 educational programs, including conferences and e-learning courses. Membership provides access to personalized research services and daily news delivery. The International Foundation sponsors the Certified Employee Benefit Specialist® (CEBS®) program in conjunction with the Wharton School of the University of Pennsylvania and Dalhousie University in Canada.