Positive outlook on employer coverage

June 10, 2013

Few employers say they will drop benefits or reduce workers

Health plans might be distracted by the individual and exchange markets as they transition under health reform, but employer groups will remain their core coverage segment.

A recent survey by the International Foundation of Employee Benefit Plans reveals that 93.5% of employers fully expect to continue coverage for full-time workers. Another 4% say they are “somewhat likely” to continue coverage, while 2.6% say they are somewhat unlikely, very unlikely or will not continue coverage.

Main reasons for continuing coverage include retaining and attracting employees. Only 6.8% of respondents said they want to continue coverage to avoid penalties.

Industry observers have cautioned that employers could drop benefit plans or adjust workforce numbers as a reaction to health reform provisions. The foundation survey indicates that 11.1% of respondents plan on adjusting hours so fewer workers qualify for benefits. Additionally, only 1.4% say they will reduce hiring to stay under the 50-employee threshold to avoid the employer mandate.

Overall, the outlook for employer group segments seems positive, according to the survey results. The foundation cautions that some changes firms are making might not be directly influenced by health reform but rather could be a byproduct of other market changes.

More than 148 million people are covered under an employer plan in the United States, according to the Kaiser Family Foundation. Estimates vary on how many Americans will gain coverage under health reform, but most of the newly insured will be individuals and those joining Medicaid.