Human Resources News & Insights

Employers admit to not-so-nice moves in wake of health reform

The Obama Administration probably isn’t going to like this latest piece of research on its healthcare reform law. 

For starters, 52% of employers in a recent survey said the Affordable Care Act (ACA) has had a negative effect on their organization thus far. Meanwhile, just 11% feel it’s had a positive effect.

One of the biggest complaints employers have about the law, aside from its cumbersome regulations, is that the law has failed to deliver on one of its biggest promises: reining in skyrocketing healthcare costs.

In fact, 89% say health costs have continued to increase for their organizations, and they’re blaming it on the ACA.

Not telling the whole story

It comes as no surprise employers dislike the ACA because of rising healthcare costs. But the reality is, costs were skyrocketing prior to its passage and implementation, and opponents of the law have been quick to make it the scapegoat for a problem that actually preceded its passage.

Bottom line: Some of the numbers in this survey should be taken with a grain of salt.

Who are they?

The survey was the fifth in a series by the International Foundation of Employee Benefit Plans, a nonprofit research and education organization, on how single-employer plans are being affected by the ACA.

The survey was sent to single-employer plans from the organization’s database, and the 691 survey respondents were HR and benefits professionals, along with experts in the industry.

A hair over 90 (13.5%) of those respondents represented employers with 50 or fewer employees.

Workforce reductions are real

Some of the more interesting findings from the study — and potentially the most worrisome for the Obama Administration — were employers’ acknowledgements that as a result of the law they’re taking some drastic measures to minimize their responsibilities under the ACA.

Some interesting confessions by smaller employers (those with fewer than 50 employees):

  • 11% are adjusting hours so fewer employers qualify as full-time employees
  • 16% are reducing the size of their workforce, and
  • 10% have cut back on hiring in an attempt to stay under the law’s 50 full-time employee threshold.

Larger employers have gotten in on these acts as well, although to a much smaller extent:

  • 8% are adjusting hours so fewer employees qualify as full-time employees
  • 3% are reducing the size of their workforce, and
  • 2% have cut back on hiring.

Cost containment measures

Cutting employees, hours and hiring isn’t the only news bound to rub workers and the White House the wrong way.

Employers are also taking steps to rein in their healthcare expenses that will force workers to shoulder more of the cost burden.

Examples:

  • 32% of employers are increasing out-of-pocket costs
  • 30% are increasing employees’ share of plan premiums
  • 30% are increasing in-network deductibles
  • 24% are increasing copayments or coinsurance for primary care
  • 20% are increasing employees’ share of dependent coverage costs
  • 19% are increasing employees’ share of prescription drug costs
  • 11% are modifying/adding tiers to their plan’s cost-sharing structure
  • 8% are increasing 100% employee-funded voluntary offerings, and
  • 3% are structuring premiums based on employees’ income.
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  • Bill Glenn

    The general public needs to be better educated about fundamental economic truths. And one of those fundamentals in connection with the ACA is that ANY TIME you increase the demand for a product (health care) without increasing the supply (of doctors, nurses, etc..) THE COSTS MUST RISE, &/or scarcity WILL OCCUR. There is no escaping this truth.
    The most fundamental flaw in the ACA approach is that is tries to increase health care availability for more people and does nothing for its supply. Thus it will be a central and unequivocal factor in the increase in health care costs. This fact does not even include the increased costs associated with the increase in the ACA’s administrative burden.