PPACA, costs fuel 2013 plan designs
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Health care reform is poised to create a host of challenges for businesses of all sizes, but it may be the smallest companies that face the biggest decisions.
A new government report by the General Accounting Office (GAO), which culled together more than 25 separate studies and analyses, finds that the Patient Protection and Affordable Care Act (PPACA) will have “a more dramatic effect on small employers,” according to a report by SmartHR Manager.
The GAO research suggests that the law likely will drive many small businesses to either make dramatic changes to their current plans or drop health care coverage altogether.
More cost sharing with employees and shifts toward account-based plans and self-funding are likely for the years to come, the report notes.
Although many of the provisions of PPACA don’t take effect until 2014, the law — along with the continuing trend of skyrocketing health costs — is prompting many employers to take major steps during this enrollment season, a recent survey suggests.
An annual study by the National Business Group on Health (NBGH) finds that employers are increasingly turning to high-deductible health plans (HDHPs) to control costs, a Kiplinger online report notes. For instance, while more than half of employers say they’ll offer an HDHP paired with a health savings account in 2013 (a figure that’s remained stable for several years), 19 percent plan to make it the only option for employees — up from 7 percent in 2009.
The NBGH report noted that other top enrollment trends for 2013 include:
- Better tools to help employees compare and analyze health care costs.
- Richer incentives to encourage employees to participate in wellness programs compared with previous years.
- Adjustments to health flexible spending accounts to comply with the $2,500 annual contribution cap required by PPACA.
Yet as employers begin to create strategies to adjust plan design and costs under PPACA, many still remain in the dark as to how to fully implement the law, according to a new survey by Deloitte.
Only 40 percent of midsize and large companies responded that they feel “well prepared” to comply with PPACA, according to a report published in PLANSPONSOR on the study of employers with 50 or more workers. That number drops to only 25 percent among smaller business owners, the study finds.
Despite the compliance and cost challenges that PPACA presents, most employers aim to continue offering benefits. Only 9 percent of respondents to the Deloitte poll said they expect to drop health coverage in one to three years.
DISCLAIMER: Because of the generality of this update, and based on particular situations, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice, financial advice and/or the advice of a licensed insurance or certified human resource professional.
© Connelly, Carlisle, Fields & Nichols 2012