Costs to the company aren't the only monetary factors to consider
By Jennifer Agiesta and Tom Murphy
Associated Press
Despite years of rising medical costs and pressure from the health care overhaul, employers consider employee health insurance a priority. But new surveys suggest coverage may grow skimpier in the coming years.
A poll from The Associated Press-NORC Center for Public Affairs Research found that companies that offer health insurance see it as a key tool to attract workers and keep them on the job. But they're also sweating the expense, with 86 percent citing the cost of coverage as a main factor in picking a plan.
Five key findings from the poll:
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WHEN OFFERING BENEFITS, COST IS TOP OF MIND
Nearly 9 in 10 employers who offer health insurance benefits call the cost to their organization an important factor in choosing a plan. Asked to name the top factor, more cited cost than any other option.
But costs to the company aren't the only monetary factors on employers' minds. The burden on employees matters, too. About 8 in 10 weigh the cost of premiums, and 7 in 10 say deductibles and out-of-pocket costs are a consideration.
Offering insurance also can make good business sense. Companies get a tax break for offering benefits. They lose that if they drop coverage. And, depending on a company's size, it also may have to pay an overhaul-mandated fine for not providing coverage.
About a quarter say a major reason they offer insurance is the tax deduction they get in return, and 18 percent say the tax benefits for employees are a major factor.
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BENEFITS OF BENEFITS
Still, money isn't everything. Eight in 10 companies that offer insurance said they do so mainly because it's the right thing to do, according to the AP-NORC Center poll, while about 6 in 10 say it helps recruit and keep workers.
Fewer weigh employee preferences, however. Just 37 percent call those an important consideration, and 45 percent say employee feedback is important in choosing a plan.
The connection between health and productivity matters too. Four in 10 say they offer it to help keep employees healthy and productive, and a third to reduce absenteeism.
But many employers face challenges in trying to figure out if a health insurance plan is of high enough quality to actually help keep their employees healthy. Few businesses surveyed use any type of objective quality data in evaluating which plans to offer, and just 1 in 10 say they would be willing to pay more for a plan that carried higher quality ratings.
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MAKING CHANGES
Among employers who offer insurance, 27 percent had changed their insurance offerings in the past year and another 34 percent shopped around for a new plan, according to the AP-NORC Center survey.
A separate survey from the benefits consultant Mercer found that only 4 percent of all large employers say they will likely drop their employee health plans within the next five years, a figure that has trended down over the past few years.
"We've been hearing lots of people blowing alarms about employers dropping plans and getting out of the business, but that's never what our data showed," said Beth Umland, Mercer's director of health and benefits research.
All told, just 11 percent of all employers in the AP-NORC Center survey said they had dropped insurance at some point in the past.
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RESPONDING TO THE 2010 HEALTH OVERHAUL
Six in 10 employers surveyed say the 2010 health insurance overhaul could impact the way businesses offer benefits, but they are divided on exactly how. About a third think it will make it harder for businesses to scale back their benefits offerings, while a quarter say it will actually make that easier to do. The remaining 35 percent say it won't matter much.
Yet only 3 percent of organizations that currently offer health insurance and would be required to offer coverage as the overhaul is implemented say they plan to change employee schedules to reduce their burden under the law.
The overhaul also created public insurance exchanges on which people can buy coverage, which could offer a safety net for companies that had offered benefits only because their employees had no other way to get them. One in 5 employers surveyed say they are examining the design of the exchange plans as they consider changes to their own benefit offerings.
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NEW MODELS GAINING A FOOTHOLD
While many companies remain resolute about offering coverage, the expense may become too much for smaller businesses that generally have less control over rate increases and what they offer their employees. The Mercer study found that 16 percent of companies with 50 to 199 employees say they are likely or very likely to drop medical plans in the next five years.
Many companies have pared their coverage by making their workers pay a bigger share of the doctor bill. In some cases, they've also cut coverage for spouses of workers who can find insurance elsewhere.
The AP-NORC survey reveals employers are using a range of strategies as the market changes. About a quarter of those offering their employees any plan give them a choice from multiple plans, and 6 in 10 who offer any type of plan say at least one of them is a high-deductible plan. One in 7 offers a plan that includes a high performance or tiered provider network. And half of all employers surveyed, regardless of whether they offer insurance, offers some type of wellness benefit.
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The AP-NORC Center for Public Affairs Research survey of employers on the health insurance market included interviews by telephone or online with a representative sample of 1,061 private sector companies with at least three employees. It was conducted by NORC at the University of Chicago from Aug. 19 through Oct. 8, with funding from the Robert Wood Johnson Foundation. For results among the full sample of employers, the margin of sampling error is plus or minus 5.6 percentage points.
Published: Tue, Nov 25, 2014
