Expert Points To Impending Changes From ACA That Employers Should Consider

Thirty-three percent of individuals do not think that the Patient Protection and Affordable Care Act (ACA) will increase health care costs at all, according to Jason Speer, a consulting actuary at Milliman USA, speaking June 4 at the “GCG Regulatory and Compliance Update Seminar” in Rosemont, Ill. These results are from the GCG Benefits Benchmarking Survey for 2013, with 395 companies participating. The survey also found that:

• 29 percent expected the ACA to increase health care costs only by 1 percent to 2 percent;

• 16 percent expected it to increase costs by 3 percent to 4 percent;

• 9 percent expected a 5 percent to 6 percent increase;

• 2 percent expected a 7 percent to 8 percent increase;

• 4 percent expected a 9 to 10 percent increase; and

• Just 7 percent expected an increase of more than 10 percent.

However, Speer pointed audience members to some factors that survey respondents may not have thought of, such as fees (like the Patient Centered Outcomes Research Institute (PCORI) fee and the Transitional Reinsurance Program fee starting in 2014), that may be generated by various provisions of the ACA, and said that those “fees alone will cause increases.”

He added that employers also could expect increased costs because the ACA will probably add people to employer health care systems. Speer also theorized that currently uninsured employees may increasingly opt for employer plans as the amount of the individual mandate tax rises over the next few years. He stated, however, that state exchanges and Medicaid expansion (in certain states) may pull some people away from employer plans.

Respondents’ apparent failure to predict possible cost increases should not be entirely surprising, in light of GCG 2013 survey results revealing that a full 64 percent of respondents had not completed a formal analysis of the cost impact of the ACA. Seven percent were unsure if they had or not, and 29 percent had completed a cost impact analysis.

Speer also advised plan professionals to think about what level of state exchange plan (platinum, gold, silver, bronze) will be equivalent to the health plans they are going to offer their employees, with regard to such features as deductibles and out-of-pocket maximums. Employees will probably make the same comparisons and possibly opt for the exchanges, leaving their employers liable for a $3,000 penalty, depending upon whether or not the employees receive premium subsidies and whether or not the employer’s coverage offers minimum value or is unaffordable.

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