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How Employers are Mitigating ACA Health Insurance Costs

How Employers are Mitigating ACA Health Insurance Costs

If you kept up with the news regarding the Affordable Care Act last year, you likely saw dozens of headlines proclaiming the likelihood that the employer mandate and penalty portion of the President’s signature healthcare law would result in millions of Americans losing their employer-sponsored healthcare coverage. Fortunately, recent data indicates that these dire predictions are unlikely to come to pass—at least in the near future.

A report published by the International Foundation of Employee Benefit Plans, a Wisconsin-based association serving the employee benefits and compensation industry, states that almost 75 percent of employers say they “definitely will” continue to offer their full-time employees group health benefits during the coming plan year. This includes employers with at least 50 full-time employees and more than 100 total employees, the group that must begin providing an ACA compliant health coverage option next year or pay penalties. Employers with at least 50 full-time employees and 50 to 99 total employees must do so in 2016.

The report also stated that ongoing implementation of the ACA has increased the total cost of providing group health benefits by 6.8 percent in 2014. They based this figure on data gathered from 600 U.S. employers of various sizes. To minimize the effect of this increase, many employers have begun to ask participating employees to pay for a greater portion of their healthcare benefits. Ways in which they’ve done so include:

  • Increasing the out-of-pocket limits on their chosen healthcare plan. According to the report, these limits have increased 19.6 percent since 2012.
  • Increasing their employee’s share of the health insurance premium. Since 2012, employers have asked workers to pay 12.3 percent more of the premium cost.
  • Increasing in-network deductibles on their chosen healthcare plan. According to the report, in-network deductibles on employer-sponsored health insurance plans have increased 14.7 percent since 2012.
  • Choosing plans with higher copayments or co-insurance for primary care. Since 2012, employers have asked workers to pay 10.9 percent more in primary care copayments and co-insurance.

While the majority is confident that they’ll be able to use these methods to mitigate the rising costs of mandated employer-sponsored coverage in 2015, many are still concerned about the future. Only 55 percent say that it is “very likely” they will continue to offer group health benefits five years from now. And 21 percent predict that the excise tax on high-cost coverage that will take effect in 2018 will have a very costly impact on their business.

Whether you want to explore options for reducing costs while still offering your employees an ACA compliant plan or need to implement this benefit before the 2015 deadline, contact your benefits advisor today.