Most Employers Plan to Continue Offering Health Coverage in, After 2014, Survey Finds

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A majority of employers plan to continue providing health care coverage to their employees in 2014 when the 2010 federal health care law's “play or pay” provisions take effect, according to survey results released June 11 by the International Foundation of Employee Benefit Plans.

Nearly half (46.2 percent) of respondents said they will continue to provide health care coverage to employees in 2014, and 39.3 percent said they are “very likely” to continue offering coverage, according to results of the survey, presented in an IFEBP report, Health Care Reform: 2012 Employer Actions Update.

Only 1 percent of survey respondents indicated that they plan to discontinue coverage in 2014, IFEBP said.

IFEBP conducted the survey ahead of the Supreme Court's ruling on the constitutionality of the Patient Protection and Affordable Care Act (Pub. L. No. 111-148), which is expected to be rendered in late June.

Wait and See.

“Organizations are at varied stages of assessing the impact of and developing approaches to reform,” IFEBP said.

Almost half of employers surveyed (47.2 percent) said they are focused on implementing the provisions of the health care law, while 39.1 percent indicated they are in the process of developing “tactics to deal with the implications of reform,” the survey said.

About one-third of employers (31.3 percent) said they are taking a “wait and see” approach with regard to implementation, the report said. This response was more common among smaller companies, it said.

Eighty percent of those taking a wait-and-see approach said they are waiting for the Supreme Court's decision on PPACA, 62.4 percent are waiting for further regulatory guidance, and 52.1 percent said they are waiting for the outcome of the presidential election, IFEBP said.

Cost Drivers.

Regarding the cost of implementation, 38.7 percent of surveyed employers said that extending coverage for adult children to age 26 was the greatest “cost driver” among PPACA's provisions, IFEBP said. The second- and third-most-significant cost drivers among employers surveyed were no cost-sharing for preventative care (8.6 percent) and administrative costs (7.8 percent).

Almost 20 percent of respondents said none of the previously implemented provisions has increased their costs, the report said.

Employers also expressed significant concern about the cost of future PPACA provisions, with 19.6 percent citing the law's “Cadillac tax” on high-cost health insurance plans that will take effect in 2018 as the most likely to increase costs. Starting in 2018, PPACA will levy a 40 percent excise tax, dubbed the “Cadillac tax,” on health coverage costs exceeding $10,200 for single coverage and $27,500 for family coverage.

Other future provisions that employers anticipate will drive up costs include automatic enrollment of new hires (15.6 percent), providing affordable coverage to full-time equivalent employees (15.3 percent), and getting rid of pre-existing condition exclusions (14.6 percent), the report said.

The IFEBP report, free to members and $50 for nonmembers, is available at