Survey: 9% of Employers Plan To Drop Coverage Because of Reform Law
About 9% of midsize and large companies plan to drop insurance coverage for employees when state health insurance exchanges launch in 2014 under the federal health reform law, according to a Towers Watson survey, Modern Healthcare reports.
The survey of 368 companies found that some of the employers have plans to increase pay or provide other benefits to make up for the loss of coverage (Daly, Modern Healthcare, 8/24).
About 20% of the survey respondents said they are unsure what they will do as a result of the overhaul. The Towers Watson survey focused on companies ranging from 500 employees to more than 10,000.
Randall Abbott of Towers Watson said that companies that decide to drop coverage likely will be those that have a high turnover rate or a low percentage of workers enrolled in their health plans. Abbott said benefits are not crucial for employee retention in those companies, and, as a result, health coverage "is a high-cost, fast-growing expense they would like to eliminate" (Murphy, AP/San Francisco Chronicle, 8/24).
Growing List of Surveys Produce Disparate Results
The survey adds to the growing list of polls seeking to discover how employers will react to the overhaul, most of which have produced disparate results. For example:
- A McKinsey survey from June indicated that at least 30% of employers would drop coverage and force workers to use the state health insurance exchanges (California Healthline, 6/21);
- Another survey by Mercer found that about 2% of businesses said they are "very likely" and 6% said they are "likely" to drop health benefits (California Healthline, 8/4);
- A pair of reports released in June by the Robert Wood Johnson Foundation found that fewer U.S. workers received health insurance benefits through their employers over the last decade but that the federal health reform law likely will reverse that trend (California Healthline , 6/22); and
- A separate analysis conducted by Avalere Health suggested that the health insurance market will remain "fairly stable" under the overhaul, as large employers likely will continue offering plans to workers (California Healthline , 6/22).