Nearly Half Of U.S. Employers Contemplating Changes To Reward Programs In Light Of ACA

With provisions of the Patient Protection and Affordable Care Act about to go into effect, 45 percent of U.S. employers are considering making changes to their total rewards programs or workforce strategies. However, most do not anticipate changes that could negatively affect a significant portion of employees, according to the survey of 113 U.S. employers by Towers Watson.

The 2013 Towers Watson Talent Management and Rewards Pulse Survey found that of those respondents considering making changes, 49 percent either have redirected or are considering redirecting rewards from one program to another, while 42 percent either have reduced or are considering reducing subsidies for dependent health care coverage. More than one-third (37 percent) either have reevaluated or are considering reevaluating their employee value proposition to place more emphasis on variable pay. Even among organizations that are considering changing their total rewards strategy or mix, the vast majority of respondents are less inclined to consider changes that could negatively affect workers. For example:

• 98 percent said they have not and are not considering asking current full-time employees to change to part-time status.

• 95 percent have not and are not considering making greater use of contract workers.

• 89 percent have not and are not considering discontinuing employer-sponsored health coverage for some or all active full-time employees.

“How an organization balances the mix of its total rewards programs in response to health care reform will depend largely on its overall business strategy as well as its employee value proposition,” said Laura Sejen, global head of rewards at Towers Watson. “Some employers, for example, will place greater emphasis on health care benefits, while others will focus more of the total rewards package on base salary and incentives. And while there are still many questions about the actions employers will take as more of the health care provisions take effect, it’s clear that most employers are hesitant to rush and implement changes that will negatively affect workers.”

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