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Reform: 65% of employers will drop health plans in 2014 if …

Christian Schappel
by Christian Schappel
January 5, 2012
2 minute read
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The vast majority of companies say they have no plans to drop their health benefits in 2014 when the bulk of the reform law kicks in. But they said there’s one thing that could make them change their minds.
Nearly two-thirds (65%) of employers say they’d drop their healthcare plans if most of the companies in their industry eliminated their employer-sponsored health insurance, found a small survey by HighRoads, an HR/benefits service provider.
In addition, 75% said they’d consider dropping health benefits if compliance became too demanding.
But overall, 80% of employers currently have no intention of ditching their health insurance plans. And 84% said they wouldn’t consider eliminating health coverage if only a few companies in their industry dropped coverage.
HighRoads surveyed 70 employers, 30% of which were from the healthcare/hospital industry.
Summary of benefits not too demanding

One provision of the reform law that’s expected to kick in soon that apparently is not too demanding in employers’ opinions: The mandate requiring health plans to provide a Summary of Benefits to workers.
More than nine in ten (91%) of employers said they would not consider eliminating benefits based on the complexity of the new Summary of Benefits requirements. In fact, 58% said they were prepared to distribute the summaries by the original deadline of March 23, 2012. That deadline has since been pushed back indefinitely.
Other studies
Two other studies — one from Towers Watson, and one from McKinsey & Co. — released figures this past summer of how many companies plan to drop coverage once most of the reform law kicks in. Both drew the ire of the White House.
The Towers Watson study found 10% of employers plan to stop offering their employees coverage once the health insurance exchanges go live. In addition, 20% of participating companies said they weren’t sure what they would do.
The McKinsey & Co. study found 30% of all employers will “definitely” or “probably” stop offering coverage in 2014.
White House officials questioned the validity of the studies. They citing two other studies — one from the Congressional Budget Office (CBO), and one from the Urban Institute — that both projected the reform law will have little effect on employer-sponsored plans.

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