A majority of large U.S. employers are moving forward with plans to make changes to their 2011 health care benefit programs and plan to lose their grandfathered status under the recent health reform legislation, according to the National Business Group on Health, a non-profit association of large employers.
"While the health reform law has forced employers to evaluate their health care benefit strategies and decide whether to comply with the law or lose grandfathered status, they haven't lost sight of the fact that controlling rising costs remains one of, if not, their highest priority. They have to foot the bill, not the government," says Helen Darling, president of the National Business Group on Health. "In fact, with cost increases expected to accelerate next year, many of the plan design changes employers are making are being done to help curb those increases, as they have to do every year."
The group conducted a survey of large employers and finds that more than half (53 percent) of respondents are still planning to make changes to their benefit plans despite the uncertainty that exists around complying with the Patient Protection and Affordable Care Act. Another two of ten employers (19 percent) are scaling back changes they planned to make while an equal number are making no changes. The remaining respondents were still undecided pending further review of the final regulations.
Among the employers who will be making specific changes to their health benefit plans to comply with the new law, 70 percent said they will remove lifetime dollar limits on overall benefits while 37 percent reported they will make changes to annual or lifetime limits on specific benefits. About one in four (26 percent) will remove annual dollar limits on overall benefits while 13 percent will remove pre-existing condition exclusions for children.
According to the survey, employers estimate their health care benefit costs will increase an average of 8.9 percent next year, compared with an average increase of 7 percent this year. To help control those increases, employers are planning to use a wider variety of cost-sharing strategies, according to the NBGH. The survey finds that 63 percent of employers plan to increase the percentage employees contribute to the premium, up from 57 percent who did so this year, while 46 percent plan to raise out-of-pocket maximums next year compared with 36 percent this year.
The survey, based on responses from 72 of the nation's largest corporations representing more than 3.7 million employees, was conducted in May and June, 2010.
