Seventy-eight percent of employers would keep some ACA-mandated provisions if law were repealed, report finds

Health care and the future of the Patient Protection and Affordable Care Act (ACA) have been defining issues for presidential candidates this election season. A new report from the International Foundation of Employee Benefit Plans finds that if the ACA is repealed, 78 percent of employers would keep in place at least some of the provisions they have already implemented in their health plans.

Employers also report a wide-range of provisions they would like to see reinstated in new legislation if ACA is repealed, with the top being elimination of preexisting condition exclusions (38%), coverage of adult children to age 26 (31%) and increased wellness incentives (31%). A majority of employers predict a new health care reform bill being passed within the next four years if ACA is repealed.
“Employers have seen certain ACA provisions have a positive impact on their workforce,” explained Julie Stich, CEBS, research director at the International Foundation. “Mandates such as the elimination of preexisting condition exclusions and coverage of children until age 26 have allowed employees and their families to receive health care services that have made a positive impact on their physical, financial and emotional well-being.”

The report, 2016 Employer-Sponsored Health Care: ACA’s Impact, found that employers have made a number of changes to curb rising costs due to ACA, including increasing out-of-pocket limits (37%), in-network deductibles (34%) or employees’ share of premium costs (31%). Employers have also increased copayments or coinsurance for primary care (28%), increased employees’ share of prescription drug costs (25%) and increased the employee’s share of dependent coverage cost (24%). One in ten employers has adopted a full-replacement high-deductible health plan (HDHP) because of ACA.

Looking ahead, 28% of employers are currently working on changes to avoid the Cadillac tax and an additional 38% plan to do so before the tax takes effect in 2020. Just 2% of employers report they plan to pay the tax. The most common actions taken or planned include moving to an HDHP (43%), shifting costs to employees (42%), dropping higher cost plans (31%) or reducing benefits (30%). Of respondents taking these actions, 68% report they are somewhat or very unlikely to undo these plan changes if the Cadillac tax is repealed.

“Whether or not the Cadillac tax goes into effect, it will have left an impact on the health care landscape,” said Stich. “Employers are taking cost-shifting measures to avoid the tax and these efforts are shaping how Americans use and receive health care coverage.”

Employers report their biggest ACA challenge and second biggest cost-driver for 2016 is reporting and disclosure. General ACA administrative costs are noted as the biggest cost-driver for 2016 and respondents expect that to continue in the future.

The report finds that employers remain committed to offering employer-sponsored health care coverage. Looking forward five years, only 3 percent of employers say it is unlikely they will be offering health care. Employers report they continue offering coverage to attract and retain employees and to increase employee satisfaction.


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