Better Roads

December 2014

Better Roads Digital Magazine

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Page 27 of 43

SpecialReport 26 December 2014 Better Roads by Tina Grady Barbaccia B eginning in 2015, employers with more than 50 employees are required to offer healthcare cov- erage to their full-time employees or otherwise be hit with a signifi cant fi nancial penalty under the Patient Protection and Affordable Care Act (PPACA). In 2016, this kicks in for smaller fi rms. A Willis Group Holdings P.L.C. survey found that 62 percent of the employ- ers surveyed said they plan to comply with this mandate. Thirty-two percent of employers surveyed were undecided, and only 6 percent of those surveyed said they don't plan to comply with the mandate. Despite the majority of the employers surveyed planning to observe the mandate, that doesn't mean these compa- nies plan to extend benefi ts to employees' spouses without adding in a surcharge. In fact, a Business Insurance report on the study indicated that 12 percent of employers already have added a special surcharge or have eliminated coverage to employees' spouses if the spouse is eligible for coverage from his or her own employer. Between 2015 and 2018, 3 percent of employers surveyed plan to take this type of ac- tion. Another 20 percent are expected to do so, but no date has been set. The Kaiser Family Foundation says that the average pre- mium in 2013 for only covering employees was $5,884. However, adding a spouse can double the cost. Of the respondents that identifi ed a cost impact of health care reform, 54 percent noted a cost increase between 0 percent and 5 percent, while 22 percent estimated their increase in the 5- to 10-percent range – all while group medical costs for employers have continued to rise. Nearly three-quarters (74 percent) indicated their health plan costs increased in 2014, the study indicated. The Willis "Health Care Reform Survey 2014" study's key fi ndings are as follows: Employers are choosing to "play" and continue to offer health benefi ts. "'Moving away from benefi t engagement' was rated as extremely unlikely by over 60 percent of respondents and somewhat unlikely by another 17 percent," according to the study. "Employers view their medical benefi ts as an important and desirable part of their compensation offerings and they will take steps to man- age costs so that they can continue to offer benefi ts to their employees. This conclusion is also evidenced by the fi ndings that the employers represented covered the vast majority of their full-time employees already, before any mandate to do so. That demonstrates the centrality and importance of group medical benefi ts to their compensation practices." Cost shifting is only part of the solution. Nearly 75 percent of respondents experienced an increase in their health plan costs from 2013 to 2014, but of those who had a cost increase, 22 percent of respondents kept employee contributions the same. Strategies other than cost shifting, which are being utilized by employers in attempts to con- tain costs, include increasing new hire waiting periods, re- DISSECTING THE Affordable Care Act From spousal coverage to worker's comp, here's how healthcare reform may affect you and your agency or company starting in 2015. by Tina Grady Barbaccia SpecialReport

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