New survey: What are employers thinking about healthcare?

July 8, 2013

Towers Watson’s Exchange Solutions most recent live-streaming, virtual roadshow for employers was all about exchanges. We talked health care, benefits, health reform, employer action, and discovered what employers are doing now and planning to do about their health care policies and their use of exchanges.

Eighty different employers answered polls during the live-streaming event. They shared their approaches to retirees, active workers, the use of exchanges, and action around the excise tax. We were interested in learning if this smaller group had opinions that aligned with joint Towers Watson–National Business Group on Health employer survey on health care benefits Strategies for Long Term Success in Company Health Care: Following the Lead of the “Best Performers . For the most part, they did.

Employers seriously considering using exchanges
As the implementation of the PPACA inches closer, more employers are taking aggressive action to modify plan design and rethink benefit models. One of these restructuring options is using an exchange, and over half of our respondents are thinking about exchanges for at least one of their worker populations. The TW-NBGH survey indicated that one in four companies said it was very likely that they would provide access to a private health exchange; similarly, 31% of our respondents are considering private exchanges for active employees.

Retiree coverage leading the way in change
The TW-NBGH study explains that employer-provided medical subsidies for retirees have sharply declined over the past few decades, with only 15% of companies offering retiree benefits to new hires today. In contrast, we found that more than 50% of roadshow survey respondents offer some type of retiree health benefit coverage. This high percentage is likely a result of the topic of the roadshow aligning with employer interest in exchanges for retirees.

The TW-NBGH survey states that those that do subsidize coverage are increasingly utilizing account based health plans (ABHP) and private Medicare exchanges to manage and provide care to their retiree population. Similarly, 12.5% of our group said they have already implemented an exchange offering for their Medicare eligible retirees, and 11.2% say they plan on implementing one in the next few years.

Health benefits still a key workforce strategy
In line with Towers Watson’s findings on the importance of active employee health benefits, the majority of respondents to our roadshow survey consider active employee health coverage to be a top priority. In the TW-NBGH survey, 71% of employers said that subsidized health care coverage for their employees was very important. In our sample group, 55.8% of respondents said that subsidized health care benefits would be a very important part of their employee value proposition in the coming years, 20.9% said it was somewhat important, and only 9.3% said it was not important at all. Reflective of the TW-NBGH survey findings, employers plan to remain strongly committed to subsidizing health care benefits in the coming years.

Cadillac tax a key milestone ahead
In 2018, the excise tax on high-cost health plans – known as the Cadillac tax –will take effect. In order to avoid the tax, employers need to rethink and restructure their health care strategy to lower costs. As explained in the TW-NBGH survey, the implementation of account-based health plans (ABHPs) is a tool for avoiding the tax. Today, 66% of companies have an ABHP in place, and another 13% expect to add one in 2014. The survey also shows that 20% of employers place avoiding the excise tax as a top priority. In our Roadshow sample group, avoiding the tax is also a high priority; 80.9% have already thought about the implications of the tax, modeled costs and calculated when they might reach the threshold, and 46.5% of employers are already taking steps to avoid it. The excise tax is an important part of maintaining costs as health care reforms continue to unfold.

What’s your company’s take on these issues? Take the same survey here: Employer Healthcare Survey

Stay tuned: we’ll post a link to video of the roadshow event here as soon as we can.

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