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Willis Health Care Reform Survey Finds Majority of Employers Expect to Maintain Health Plans Rather Than Encourage Employees to Use State Exchanges

According to the survey, 55 percent of employers said they would continue to maintain their health plans in 2014 even if the new state exchanges offer competitively priced rates for individual employee health coverage. However, employers feel they will need to take some action to continue to maintain their plans.

The Health Care Reform Survey 2010, available here, outlines employers' perceptions regarding the Patient Protection and Affordable Care Act (PPACA) and planned responses to health care reform measures on their businesses over time. In addition, the survey provides a current snapshot of employers' needs with respect to education and resources to support health care reform compliance in the future.

The survey, a combined effort on the part of Willis Group and Diamond Consulting, represents the findings from a significant population, including 1,400 employers of varying sizes, industry sectors and geographies. Their plans, as represented by the survey, cover more than 9 million employees and dependents (including retirees).

Key findings from the survey include:

• 88 percent of respondents believe that group health plan costs will increase as a result of the PPACA mandates.
• 76 percent of surveyed employers expect administrative compliance costs will increase.
• 72 percent of surveyed employers plan to increase employee contributions in an attempt to offset the impact of higher administrative and premium costs.
• Surveyed employers indicated they might use one or more of several options to maintain plans, including passing on more costs to employees, decreasing ancillary benefits (dental, vision, etc.), or in some extreme cases, eliminating benefits altogether.
• 53 percent of employers expect the adult child coverage mandate that becomes effective for most plans on January 1, 2011, to increase the costs of their health care plan by 1 percent or more.
• More than half of the respondents noted a lack of clear understanding regarding the availability and eligibility for the Wellness Credit and Small Business Tax Credit.
• 52 percent of respondents anticipated that there would be an increase in the number of employees covered under employer-sponsored benefits.

"Health Care Reform presents one of the biggest changes and challenges to employers who offer health care benefits since ERISA was passed 35 years ago. With such a large change we felt it was important to understand how employers were interpreting and planning to handle the changes," said Pete Gruenberg, Chief Placement Officer, Willis Human Capital Practice.

"Early impressions suggest that the majority of employers do not plan to abandon their employer-sponsored group medical plans in 2014 when the state exchanges become available. This points to the commitment employers have towards employees," Gruenberg said. "However, rising costs associated with health care reform are a major concern, and many employers are looking for ways to offset any resulting cost increases," he said.

Gruenberg also noted the responses underscore the need for further education on the various programs offered under Health Care Legislation.

The survey underscores Willis's commitment to supporting clients' Health Care Reform needs with teams of actuaries, underwriters, accountants, benefit consultants, and other critical resources. For more information click here.

Willis also recently released the HCR Calculator, a tool that offers a variety of features not found in other online calculators, which typically focus on only one aspect of health care reform. This comprehensive tool includes a regulation-impact interface as well as a Cadillac Plan, Pay or Play, and Small Business Tax Credit Calculators. Each of the cost estimates generated by the Willis HCR Calculator is automatically summarized in an HCR Report Card, a one-page executive overview with major observations and a graphical display of results.

About Willis

Willis Group Holdings plc is a leading global insurance broker. Through its subsidiaries, Willis develops and delivers professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries, with a global team of approximately 17,000 employees serving clients in virtually every part of the world. Additional information on Willis may be found at www.willis.com.

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