Majority Of Employers Have “Wait And See” Approach With Exchanges

The majority of employers (82 percent) remain uncertain about health insurance exchanges, and plan to wait at least one to three years before potentially joining one, according to recent research from benefits consulting firm The Chelko Consulting Group. Health insurance exchanges were created under the Patient Protection and Affordable Care Act (ACA), and are scheduled to be operational beginning Jan. 1, 2014. However, the survey did find that employer interest in private exchanges, as an immediate plan management solution, has increased 7 percent since 2012.

Although the percentage of employers interested in private exchanges has increased, Chelko noted that most surveyed employers are not ready to change their health plans to defined contribution arrangements or private exchanges. The survey found that the majority of employers are taking a “wait and see” approach: 52 percent of respondents are planning to wait one to three years to consider a private exchange, and 30 percent of employers will wait over three years to seriously consider setting up a private exchange.

“Another indication that employers are not ready to make the move to private exchange platforms is their plan management direction which clearly focuses more on strategies with long term paybacks,” said Rick Chelko, president of The Chelko Consulting Group. According to the survey, over the next three years employers are planning to be “very aggressive” in consumer education (58 percent) and promoting employee wellness (44 percent).

The survey also found the following:

Cost increases. Almost all (98 percent) of employers surveyed expect an increase in their costs as a result of the ACA. This has grown since 2012, when 17 percent believed that the law would have no financial impact, or may even reduce their costs. Now, 38 percent of employers expect an increase in their plan costs of more than 5 percent.

ACA compliance. Every employer surveyed responded that they are concerned about ACA compliance, and 52 percent consider themselves “very” concerned. In addition, 36 percent of manufacturing employers, and 25 percent of employers overall, surveyed are very concerned about the Cadillac Tax. This is a 5 percentage point increase from the 2012 survey results, Chelko noted.

Positive vs. negative views. Chelko found that of the ACA’s major provisions, employers have a positive view of: wellness incentive allowances (58 percent), accountable care organizations (45 percent), and preventive care (41 percent). Employers are more negative about comparative effective research (41 percent), health insurance exchanges (30 percent), and the Independent Payment Advisory Board (30 percent).

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