July 10, 2012

Most Employers Still Haven’t Addressed Upcoming Health Reform Law Requirements

employer pie chartGlobal human resources consultancy Mercer’s poll of over 4,000 employers immediately following the Supreme Court’s upholding of the health care reform law found that the majority of companies had been waiting for a decision before developing a response strategy to address the provision going into effect in 2014. And though 40 percent indicated that they would begin immediate action, 16 percent said that they will hold off planning until after the presidential election later this year. But Mercer advises that companies should not hold off on efforts to comply with the law as they may face future penalties for their delay.

Indeed, many new requirements must be addressed immediately as they take effect either this year or next and including provisions that provide for benefit summary disclosures, new dollar limits on health care FSAs, and increased Medicare withholding for high-earners. Some employers have expressed concern over their ability to meet some of the new requirements, especially the provision requiring employees who work an average of 30 hours per week to be made eligible for health coverage; 28 percent of respondents said that this will present a “significant challenge” for their organization.

“Employers with large part-time populations, such as retailers and health care organizations, are faced with the difficult choice of either increasing the number of employees eligible for coverage, or changing their workforce strategy so that employees work fewer hours,” said David Rahill, President of Mercer’s Health and Benefits business. “With the average cost of health coverage now exceeding $10,000 per employee, a big jump in enrollment is not economically feasible for many employers.”

However, the most concern is reserved for the excise tax on high-cost plan that will be introduced in 2018; 47 percent of respondents reported it as the most troublesome aspect of the law for employers.

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Joshua Bjerke, from Savannah, Georgia, focuses on articles involving the labor force, economy, and HR topics including new technology and workplace news. Joshua has a B.A. in Political Science with a Minor in International Studies and is currently pursuing his M.A. in International Security.