Towers Watson Projects High Commitment to Continuing Healthcare Coverage
With the new healthcare reform law approved by the U.S. Supreme Court, employers had to decide whether or not it was worth carrying on with providing healthcare coverage to their employees. According to Towers Watson, 88 percent of employers have committed to continuing healthcare benefits into the foreseeable future. Despite a projected healthcare cost increase of 5.3 percent in 2013, employer commitment to continuing benefits actually jumped 17 percent over 2011. And though the rate of costs has slowed, 58 percent of employers believe they will trigger the excise tax in 2018 if their benefit strategy is not revamped. As such, 83 percent are planning to tackle costs in order to sidestep the tax.
“While the most significant changes mandated by health care reform will not occur until 2014, it is essential that companies develop a strategic response and prepare for these changes well in advance of then,” said Ron Fontanetta, senior health care consulting leader at Towers Watson. “These changes will have a profound impact on the way health care is delivered and how many individuals acquire health insurance, most notably retirees.”
The most common actions and programs employers are expected to utilize in attempts at cost-controlling include:
• Changing plan options (63 percent),
• Increasing the premium share paid by employees by 1 to 5 percent (42 percent),
• The use of spousal waivers or surcharges (29 percent) and,
• Increasing the premium share paid by employees by at least 5 percent (13 percent).