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Health insurance requirements acting as a drag on business?

Health Care and Health Insurance
by Dave Palmer
States continue to grapple with changing health insurance market
States continue to grapple with changing health insurance market

The Patient Protection and Affordable Care Act brought with it a requirement that companies with 50 employees or more had to provide those workers with some type of health insurance option, and that has proven controversial to say the least. Now, new data suggests that the added expenditure has led to workers paying more for coverage, and companies having to slow down their hiring efforts.

Under the ACA, though, slightly more than half of business owners polled said that they've made modifications to their health insurance programs, or will do so soon, in an attempt to comply with the law, according to the latest Business Outlook Survey from the Federal Reserve Bank of Philadelphia. Another 3 percent said they're dropping their plans entirely. Meanwhile, 40.9 percent of business owners polled said that they've made no change to their health insurance, and none said that they are planning to add health insurance coverage for the first time.

What impact is this having?
And with these changes comes a number of different situations for workers and employers alike, the report said. For instance, more than 2 in 3 companies said that the number of employees they cover is unchanged by their new adjustments, while a roughly equal proportion say that the number is either rising or falling (17.6 percent and 14.7 percent, respectively). But despite little movement, the amount employees pay into their health insurance plans is going to increase at least a little bit for 88.2 percent of companies; less than 3 percent will see a decline, and 8.8 percent will experience no change at all. Likewise, deductibles are going to increase for 91.2 percent, with none showing any improvement. Copays are similarly on the way up for nearly two-thirds of companies, and three-quarters are reporting that their workers will face higher maximums out of pocket.

With that having been noted, though, the added cost isn't going to translate into better coverage for many workers, the report said. The range of coverage consumers will be able to get under these changing plans is only increasing in 2.9 percent of cases, and the size of the networks isn't increasing for any companies. Meanwhile, 41.2 percent will be able to obtain less diverse coverage, while 26.5 percent are seeing their networks shrink.

For this reason, insurers that want to better connect with companies will need to strike a balance between providing lower costs while also ensuring that they keep the benefits as attractive as possible going forward.



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