Short Takes On News & Events

Survey: Employers Less Confident Of Future Health Benefits

By Jay Hancock

March 6th, 2014, 9:07 AM

Big employers are pretty sure they’ll keep offering workers health care coverage. But they seem a lot less sure than they used to be, according to a survey released Thursday.

Only one large company in four recently surveyed by Towers Watson and the National Business Group on Health is confident it will provide medical coverage in a decade. That’s down from 73 percent in 2007 and 38 percent in 2010.

Much of the doubt reflects “the uncertainty around the long-term implications of the Affordable Care Act,” said Julie Stone, a benefits consultant at Towers. While problems with the the health law’s online marketplaces ensure most companies don’t see them as an alternative to traditional coverage anytime soon, she said, “I wouldn’t rule out that in the five- to ten-year time range, if they’re operating more efficiently, certain organizations who don’t view health benefits as core to their employee value proposition [will] take a different approach.”

Costs for employer health plans continued to rise slowly compared with those in previous years. But they still went up by far more than overall price inflation, adding new burdens to companies as well as employees bearing more and more of the expense.

Health-related deductions from worker paychecks have been rising on average by about 5 percent a year, she said, adding: “Salaries certainly haven’t gone up 5 percent a year,” Stone said.

Counting premium contributions as well as deductibles and other out-of-pocket costs, employees are expected to pay 37 percent of all expenses incurred by big-company health plans this year, according to the Towers/NBGH survey of 595 companies employing at least 1,000 workers. That’s up from 34 percent in 2011. The average employee pays $1,200 more a year for health care than she did only three years ago, the report said.

Part of the change has to do with the switch to high-deductible plans using pre-tax health savings accounts or something similar. Such “account-based health plans” come with deductibles of $2,000 or more for family coverage – what the employee and her family pay before insurance kicks in.

Median enrollment in such plans rose from 15 percent in 2010 to 33 percent this year, the survey found. One company in seven offered only a high-deductible plan last year. By 2015 it could be nearly one in three, Towers said.

While 95 percent of the companies said subsidizing employee health coverage will be “very important” in 2015 and beyond, nearly as many expect to make moderate to significant changes in their plans by 2018.

Many are starting already.

Nearly half the respondents now require higher employee contributions for spouses and children than for the employee. Only a little more than half the companies said subsidized coverage for spouses would be a very important part of their benefits package in 2015 and afterwards.

Companies are looking hard at private exchanges — online insurance marketplaces similar to the health-law portals – run by benefits pros and offered to select employers. Under private exchanges, companies still sponsor the coverage. But they typically give workers a fixed amount to shop for plans among several insurers, leaving much of the enrollment and administration to somebody else.

Employers are embracing private exchanges most quickly for retiree coverage. But most are taking a “wait-and-see approach” on steering active employees to private exchanges, said Helen Darling, president and CEO of NBGH. (Towers Watson offers private exchanges.)

5 Responses to “Survey: Employers Less Confident Of Future Health Benefits”

  1. Janet. says:

    So many were called names when they predicted this happening a while back.
    Yet the elite said they were wrong or worse(racist/fearmonger) etc.
    Washington gets a pass in terms of cost(their plans are subsidized to 75% are yours?)
    and we get left with higher costs and docs (if you can find one) that view the gov insurance as all medicaid. I didnt think it could ever get worse than Bush. I was wrong. Worst domestic policy decisions ive ever seen. Ideology above all else, apparently even our (not their) health insurance.

  2. There are alternatives to this whole mess. Don’t feel that you have to chose government run plans. This plan was a great idea and makes people more aware of how important health insurance is but if you can’t afford it, then is won’t work. Many physicians are upset because of many factors involved in administration, reimbursements, and the idea that people can drop their plan and the offices will not be aware of this. Again, there are alternatives.

  3. quinn says:

    The big employers have nothing to complain about and everything to be thankful for with the advent of Obamacare. Face it, the big employers have been carrying the load for the small “cheapskate” employers for decades with regard to paying for America’s overall healthcare system. The small employers have been getting a free ride by allowing their employees to go without healthcare and forcing them to seek healthcare services from hospitals and government providers. Who pays for that? The big employers pay most of it in larger premiums while taxpayers picks up the rest. It’s time that “all” employers offer healthcare benefits for their employees. By doing so, the large employers will be getting a much deserved break from the high costs that they have been paying for many years. Obamacare begins a trend to force small employers to pay their fair share and to be fair and decent to their employees. Oh, did I mention the gigantic fast food corporations that pay their employees slave wages and offer their employees no serious health benefits? They have also been getting a free ride for decades! Most large fast food corporations pay the worst wages in the nation and offer almost nothing in health benefits. The fast food industry pays such lousy wages and offers such lousy health benefits that their employees are forced to apply for food stamps, public housing and public healthcare all paid for by taxpayers. The fast food industry needs to pay their employees a decent wage and offer decent health benefits and stop depending on taxpayers to bail them out. If the fast food industry did that, they would help to bring down the healthcare premiums that the other big employers are paying by being fair to their employees and paying for their health benefits. The fart food industry is a scab on society and that needs to change!

  4. quinn says:

    Correction: The fast food industry is a scab on society and that needs to change!

  5. Killroy71 says:

    You pay for your employer sponsored coverage through depressed wages. The cost of medical care goes up higher and faster than anything else – that drives up cost of coverage, and there goes this year’s raise.

    There’s no “free” health care, no matter who pays. If you think “medicare for all” is free, just ask a senior how much their medicare monthly premium costs. And they have deductibles and out-of-pocket costs, too.

    Since the medical industrial complex can’t seem to regulate its greed, it may be time for European-style price controls. You want to know why health care costs less in Europe, that’s why. Govt intervention.