The International Foundation of Employee Benefit Plans released its sixth annual survey on how employers are responding to the federal reform law. Answers from almost 600 firms and industry experts were included, with company sizes ranging from less than 50 workers to over 10,000. (IFEBP Survey) About 60% said the law has had an overall negative effect and only 12% said the ACA had a positive effect. Among those who said their view of the act has changed since its passage, more than 75% said it had become more negative. The biggest challenge caused by law is administrative complexity and compliance. 94% of respondents say they currently provide health benefits and almost all say they will continue to do so. Three major reasons were given–keep current employees, attract future talent and increase worker satisfaction and loyalty. 82% of respondents said the ACA has increased their health care costs, with the most common range being from 1% to 6%, but smaller companies are seeing higher cost impacts, largely due to increased administrative spending. And firms are not optimistic, they believe that more cost increases are in the future.
Retiree coverage continues to drop and will drop further according to the respondents. Private exchanges are used by only a few firms (more are using them for retiree coverage) but more companies say they are likely to use a private exchange in the future. Communication on health benefit issues is viewed as a challenge by many respondents, with many feeling that their employees do not understand the reform law or their benefits well, although there is a perception that the ACA has increased awareness or engagement in health care issues. 15% of companies have adjusted hours so fewer workers qualify for health benefits. Over a third have already increased employee cost and premium-sharing as a result of the law, and more plan to do so in the next year. Organizations are using more wellness, disease management and associated incentive plans. They are also doing dependent eligibility audits more frequently and more claims audits. A small number have moved to self-funding. About half of respondents say they are likely to trigger the excise tax based on current plan design and are working to make changes to avoid that penalty. High-deductible plans are becoming more common and many companies are planning to add them. The survey results suggest that the ACA has neither made health care less expensive for employers nor lessened the administrative cost and complexity of offering health benefits.