Chief HR Officers Give Negative Reviews To ACA’s Impact On Employee Health Care

The Patient Protection and Affordable Care Act (ACA) has increased health care costs, which are being largely borne by individuals with existing employer-provided health insurance, according to a survey conducted by the University of South Carolina’s Darla Moore School of Business. Fifty-two percent of the Chief Human Resource Officers (CHROs) responding to the survey reported that, as a direct result of the ACA, they have raised employee contributions toward health insurance. Eleven percent have cut back coverage eligibility, but few have moved employees to either private exchanges (1 percent) or public exchanges (.5 percent).

Even more CHROs have moved employees to consumer directed health plans (CDHPs), whereby employees receive set amounts of money for regular health care. Although the trend toward offering CDHPs was growing prior to the implementation of the ACA, with 10 percent of firms previously surveyed offering them in 2007, for example, and 13 percent offering them in 2008, it appears that the ACA has accelerated that trend. Seventy-three percent of respondents now indicate that their companies either are offering or are planning to offer CDHPs.

CHROs responding to the survey stated that a 7.73 percent increase in health care costs was directly attributable to the ACA. A substantial number of CHROs also reported that the ACA had created increases in labor costs (37 percent), as well as decreases in their employees’ quality of health care (33.8 percent), in transparency of health delivery (20 percent), in the quality of health delivery (31.6 percent), in the efficiency of health care (37 percent), and in innovation for both health care and health systems (32 percent and 30 percent, respectively). It was not clear from the published survey results exactly what these decreases entailed.

Part-time employees. Employers also are apparently taking a more rigorous stance with regard to how many hours a part-time employee can work, in anticipation of upcoming employer mandate penalties. The ACA describes employees working at least 30 hours per week as full time, and many employers are concerned that enough part-time workers would end up working more than that. One employer was quoted as saying of his part-time workers who were limited to the ACA’s definition of part-time hours, “we frequently had people that worked 32-34 hours, and if enough of them did so, it would put us a risk for fines. Therefore we now limit workers to 27 hours to ensure that we minimize the number that might exceed 30 hours.”

Many employers (29.7 percent) also have taken or plan to take some action to encourage part-time employment or limit the use of full-time employees. In support of this number, the article references the June 2014 jobs report, which showed an increase in part-time employment of 840,000.

For more information, visit http://www.moore.sc.edu/UserFiles/moore/Documents/News/CHRO%20ACA%20Report.pdf.

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