The vote to pass the AHCA in the House – a first step on the road to repealing the ACA – has raised questions about how employers might respond if the ACA requirements affecting employer-sponsored plans were to be lifted. One way to approach that question is to look at how employer plans changed – and how they didn’t change – under the ACA. We went back to past Mercer National Survey of Employer-Sponsored Health Plans databases to find out.
- Eligibility. While 22% of employers with 50 or more employees (and 37% of those with 500 or more employees) said they would need to make changes because of the ACA’s 30 hour rule in 2015, we’ve seen no evidence that enrollment in employer plans has risen as a result.
- Mini-meds. Before the ACA, 7% of all large employers (and 21% of large retail employers) offered mini-med plans, generally to their part-time employees. The 60% plan value rule effectively put an end to mini-meds.
- Affordable contributions. Only 14% of respondents to our 2014 survey on health care reform said they would need to take steps to meet the ACA’s affordability rules. Employers have historically been slow to raise contributions as a percent of premium. The average contribution for employee-only coverage in a PPO plan was 24% in 2009, the year the ACA was signed, and it was 24% in 2016. The average dollar contribution has risen along with plan costs, but proportionally, contributions have not increased.
- Deductibles. Whether this was an intended or unintended consequence, deductibles have risen sharply under the threat of the ACA’s excise tax. Since 2010, the average individual PPO deductible has risen by an average of 7% annually, faster than overall growth in medical plan cost.
- Lifetime limits. In 2009, 71% of large employers had lifetime benefit maximums in their PPO plans and the median limitation used was $2,000,000. While it was rare that a plan member would reach the maximum benefit amount, the ACA outlawed the use of lifetime limits entirely.
Would a repeal mean that employers revert back to pre-ACA plan designs? Not necessarily, and certainly not at once. Some employers might reinstate mini-med plans as a way to provide some type of health benefit to part-timers not eligible for the company’s comprehensive plan. It seems unlikely that employers that have raised deductibles would lower them – but it also seems unlikely that employers would take away coverage from any employees or reduce plan values below the current 60% minimum. Before the ACA, most employers voluntarily offered comprehensive health benefits that already met the ACA minimum requirements; by and large, the requirements targeted plans that were the exception rather than rule.
The repeal and replace bill that just passed in the House faces tough challenges in the Senate. Even so, with the Senate reportedly working on a bill of their own, it’s a good bet that this Congress will make some changes to the ACA – and, one way or another, that will mean change for employer plans too. This process may take some time. We’ll keep you posted.