What Lawmakers Need to Know About Employer Health Coverage

The International Foundation of Employee Benefit Plans just released the results from a survey of 727 employers asking about their views on the ACA and repeal-and-replace efforts. Interestingly, only 19% said they would like to see the ACA repealed entirely. That’s a lower “pro-repeal” percentage than we’ve seen in past Mercer surveys, suggesting that attitudes about the ACA have shifted during lawmakers’ attempts to come up with a viable replacement plan.

The survey asked whether employers supported or opposed specific existing provisions in the ACA and in proposed replacement plans. The five provisions garnering the most opposition were a mix of existing ACA provisions and proposed replacement plan provisions:   

  • Cadillac tax
  • Premiums based on medical experience (charging sick people more)
  • Raising the ACA cap on higher premiums for older policyholders from 3:1 to 5:1
  • Limits on flexible spending accounts
  • Ban on annual benefit

The five provisions with the most support were:

  • Maintaining the tax exclusion for employer-sponsored health insurance for both employers and employees
  • Expanded use/flexibility for HSAs
  • Wellness incentives (to the level permitted in the ACA)
  • Ban on pre-existing condition limitations
  • No cost-sharing for preventive care

What about an exit strategy?  Nearly all survey respondents -- 96% -- said they would still offer coverage even if the employer mandate is repealed. That’s because virtually all large employers and many smaller employers already offered coverage voluntarily prior to the mandate – they see it as necessary to attract and retain employees and to provide for their well-being. Further, most provided coverage that already met the ACA’s requirements.  Nearly two-thirds of the employers in the IF survey said they would retain all (21%) or the majority (41%) of ACA provisions currently in place if the ACA were repealed.  

The few survey respondents who said they might terminate their plans cited rising cost as the primary reason.  And, as we’ve discussed on this blog, the BCRA falls short in addressing the underlying high cost of healthcare in the US. In fact, the proposed Medicaid cuts could have serious negative consequences for employer plans if growth in the number of uninsured results in cost-shifting, as it almost certainly would. Employers have demonstrated that initiatives like value-based care and specialty pharmacy management can bend the cost curve and improve health outcomes. A bill that supported efforts to transform the US healthcare system for the better would have been most welcome – but, so far, that’s not a bill we’ve seen.

Go to full articlewww.ifebp.org

Beth Umland
by Beth Umland

Director of Research, Health, Mercer

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