More than a year after the passage of the Accountable Care Act (ACA), employers have seen an average increase in enrollment of their employees in health plans of around 2 percent, probably because the act extended eligibility for coverage of employees’ children up to age 26. That number is going to grow by another 2 percent on average by 2014, as employers will be required to automatically enroll newly hired and newly eligible full-time employees in a health plan, says a new survey from Mercer, the large human resources consulting company.
Expect costs to rise as a result. The Mercer report says about 28 percent of employers that responded expect an increase of at least another 3 percent in their projected 2014 plan costs, with 15 percent expecting an additional 5 percent increase or more in costs. The new provisions include extending coverage to all employees working 30 or more hours per week and to new full-time employees who are auto-enrolled. The law requires plans to pay for at least 60 percent of covered services.
About 27 percent of employers expect the increases attributable to the ACA to be more modest — about 2 percent or less — and 15 percent say their plans are already in compliance and will see no cost increases. The remaining 29 percent could not estimate cost increases.
Despite the increases, however, employers remain committed to providing coverage to their employees. Mercer reports that just 2 percent say they are “very likely” to terminate coverage after the insurance exchanges are operational, with another 6 percent “likely” to do so.
“That employers remain committed to providing employees with health insurance more than a year after the passage of the health reform legislation would seem to be good news for managed care plans,” says Beth Umland, director of research for health and benefits at Mercer. “Consumer-directed health plans, which generally meet the minimum plan value standard but cost significantly less than the traditional PPO or HMO plan, are likely to see increased growth.”