A new survey conducted by consulting firm Deloitte finds that “Nearly 60% of U.S. CFOs say their companies have raised or will be raising employees’ financial responsibility for health care costs, and about half say the ACA is the reason.”
The report goes on to say that “Another 13% say they have reduced earnings forecasts due to the Act, and about 8% say they have constrained hiring. Interesting to note, however, is that only 4% of CFOs say they have shifted toward part-time staffing to avoid increasing coverage.”
Several media outlets commented on the report yesterday, including The Hill’s Healthcare Blog, which says “ObamaCare is aggravating the trend of employers charging staff higher healthcare costs in order to contain spending” and that “High-deductible plans are increasingly common for people receiving health insurance through their jobs.”
Both of these trends make sense. As premiums rise, obviously employers are going to have to charge employees more money for their health insurance. That doesn’t mean they’re transferring the entire cost increase to employees – the amount employers are paying is going up too. And we’ve witnessed the growth in HSA-compatible High Deductible Health Plans for years, so this is nothing new. The article does point out that experts predict these plans could account for “half of all work-based health policies within a decade.”
So this new survey doesn’t really report on a new trend – higher employee premiums for plans with higher out-of-pocket expenses – but rather reports on what companies are telling their employees about the trend: they’re blaming the Affordable Care Act. Fair or not, Obamacare is the logical scapegoat. And as news spreads about how employees are paying more because of the law, it makes it even easier for employers who are thinking about dropping their group coverage altogether to go ahead and pull the trigger.
If they could get away from group health insurance as an employee benefit, a lot of companies would, and the ACA gives employers a pretty good reason.
At HPA, we’ve been predicting a shift from employer to individual coverage ever since the law was passed, primarily because of the generous government subsidies that are available to people without job-based coverage who earn less than 400% of the Federal Poverty Level. “We’re dropping the group coverage for your own good” is the message employers making this decision have been passing on to their employees. But now, with reports like this one that blame the law for higher premiums and higher OOP costs for employer-sponsored coverage, companies have yet another explanation for their employees.