ACA’s Impact On Hiring, Benefits Affects Ability To Compete

Twenty-five percent of employers are hiring more part-time workers with another 14.5 percent considering similar action due to the impact of the Patient Protection and Affordable Care Act (ACA), according to the 2014 Affordable Care Act Impact Survey. The survey, conducted by Cherry Bekaert Benefits Consulting, also found that 25 percent of respondents are considering eliminating the health coverage they provide.

Impact on business. The survey found that employers believe the ACA will have a negative impact on business. Seventy-three percent of respondents indicated that the ACA will negatively impact profits, while 54 percent indicated that wages will suffer. In addition, 44 percent indicated that higher medical plan costs will cause them to be less competitive.

Medical plan costs. Employers say the ACA is driving costs higher, according to the survey. Eighty-three percent of respondents believe that the ACA will continue to put upward pressure on medical plan costs. Seventy-nine percent indicated that premiums and related costs increased at the most recent medical plan renewal. In addition, 46 percent indicated they increased employee contributions, and 49.1 percent made plan changes to decrease benefits and costs.

The survey also found that 26 percent of employers indicated they have already reduced expenditures, or are considering such action, on dental, vision and life coverages as a result of the ACA’s impact on medical plan costs.

Additional findings. The survey also found the following:

• Employers are taking steps to control the cost of health insurance by either increasing contributions and/or reducing benefit levels.

• In transferring cost burden to participating employees, the results are contradictory to stated objectives of the ACA as it will be more difficult and costly for participants to access health care.

• More and more employers are changing full-time positions to part-time to avoid employer requirements of the law which could negatively impact employee morale, productivity, and loyalty.

• Employers are frustrated with complexities, costs, and administrative burdens imposed by the ACA and increasingly considering the elimination or reduction of employee benefit plans.

• Overall perception and trending impact of the law is negative with ACA reducing profits and making it more difficult for businesses to compete.

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