Most Employers Do Not Understand True Cost Of Complying With Health Care Reform

The majority of employers want to avoid cost increases for their group health plans—however, 51 percent indicated that they have not calculated the cost of complying with the Patient Protection and Affordable Care Act (ACA), according to a recent research from global insurance broker Willis Human Capital Practice.

Among employers who have tracked the cost of ACA compliance, Willis’ Health Care Reform Survey 2013 noted that 50 percent indicated that health care reform has increased their costs. While 60 percent of employers stated that avoiding ACA cost increases is very important to their businesses, employers are relying upon inaccurate “perceptions of cost” as they plan their responses to health care reform, noted Willis. Specifically, when asked about the impact of the ACA on various aspects of plan design and benefits offered to employees, the majority of employers (most of whom had not studied the cost impact of health care reform on their plans) said that health care reform has not yet affected their plans.

Perhaps because many employers assume that health care reform will generally not affect their costs, only 20 percent of surveyed employers plan to adjust other rewards (i.e., retirement, dental, vision, salaries, vacation, bonuses) in order to offset the cost of ACA compliance. Consequently, the vast majority of employers still hope to comply with health care reform and expand their health coverage as necessary—without reducing other benefits.

The survey found the following:

  • 55 percent of employers felt that competitors would shift costs to employees; however, only 34 percent of employers indicated that they might take this same action.
  • Employers indicated that they are now much more likely to voluntarily relinquish grandfathered status. In 2012, the study found that 39 percent of employers chose to voluntarily forego grandfathered status, while in 2011, only 13 percent of employers made the same decision.
  • Most employers intend to “play” under the “pay or play” mandate, and are predominantly planning to offer coverage that exceeds the “minimum essential coverage” requirement, and then adjust coverage and contributions after the fact in order to manage expenses.

The survey includes responses from more than 1, 200 employers. For more information, visit

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