Employers Look Hard At Health Insurance Exchanges for 2014

Wednesday’s Post 11/9/11 –   Towers Watson, a leading Global Professional Services Company, recently carried out a survey to assess the impact of Insurance Exchanges which are set to open their doors in 2014.  Ron Fontanetta and Randall Abbott, Senior Healthcare Consulting Leaders at the company; conducted the survey for over 350 Companies considering these exchanges.

According to the report, 45% of employers will restructure their current Healthcare Plans while the rest are still unsure of what to do. Most companies interviewed plan to make minor adjustments in line with the new act set to take effect from next year onwards. Employers project the cost of Healthcare to increase by nearly 6 % next year, compared to  nearly 8% increase experienced in 2011. Many companies are putting measures in place already, to cushion themselves against the excise taxes envisaged in the Reform Act.

71% of the employers interviewed said that they would continue to give medical cover to their employees up to 2014.  29% are mulling over whether to stop the programs and instead offer salary increments to their staff. 54% of the respondents plan to end Healthcare Plans for retirees.

The survey revealed that the Obama Healthcare Plan was the major reason behind the shifting positions among employers. 53% of employers are confident that implementation of the Act will be successful in the long-term. Nonetheless, most do not believe that the plan offers a better solution, compared to the current company-sponsored medical plans. Over half of the respondents believe that the Government will introduce some form of taxation for businesses by 2018. In the same measure, most employers say that staff members still value Medical Cover as the most important incentive from companies.

According to Ron Fontanetta many companies will only introduce minor policy changes in Healthcare next year. However, a minor percentage is agitating for radical reforms by the use of account-based platforms, incentive and subsidy changes. In this regard, seventeen Percent of employers plan to offer account-based Health plans (ABHP) to their staff. By 2014, 74% of companies will use this system of Medical Insurance Coverage. A fifth of the respondents have plans to elevate the use of preferred networks, while others will use value basis to offer benefits. Forty-Seven Percent of employers might decrease the benefits of active staff members while Fifty-Seven Percent will lower contributions of low cadre staff.

The main conclusion drawn from the study is that most companies will amend their Healthcare policies from next year. A fifth of the companies polled were considering to lower subsidies for staff members families. Surcharges and waivers will be on the offing, if other types of coverage are not available for workers.  All the same, employers still have the resolve to sponsor Healthcare for their workforce. However, there is no consensus on the preferred strategy to adopt in line with the reforms.


Michael E. Dortch
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