Employers’ Not Dropping Health Benefits for Employees

The Affordable Care Act has not driven employers to drop health benefits for their employees as was expected – according to two surveys. 1 % of employers stopped offering health coverage this year and this can be said of large employers as well as those with 50 or fewer than 50 workers even though they could qualify for SHOP’s which is a part of the health-care law.

When a survey of more than 3,000 people was conducted by the Employee Benefit Research Institute and the Society for Human Resource Management, it found that companies continued to sponsor health care. It was found that a ratio of 1 in 12 companies was eliminating coverage for spouses of the employees and 1 in 76 companies were dropping coverage for part time workers. It was the larger companies which were changing rules to eliminate spouses from health plans rather the small ones.

According to a recent survey conducted by Mercer – a consulting firm, fewer employers were likely to drop coverage within the next 5 years. The survey also indicated that as in the past, larger employers were more used to the idea of providing insurance for their workers rather than small businesses. Coverage is often more expensive for small firms because they spread the risk of big medical bills among fewer workers.

On the whole the Mercer survey suggests that the average cost of health benefits for an employee this year is about $11,000 and that the cost for next year will increase, on an average, by 4.6 percent. Although the increase is more than it was this year, it is less than the typical increase of 7 percent per year over the past 15 years.

With the health-care law it is mandatory that employers with 50 or more workers to offer health insurance to most of their full-time workers or to pay a fine. The Obama administration has postponed that aspect of the law, which is now scheduled to start next year.

The new survey suggests that “so far, the changes are marginal,” said Paul Fronstin, a researcher at the Employee Benefit Research Institute. He speculated that, as the economy has improved and unemployment has lessened, a tighter job market may motivate employers to keep benefits for workers. “Every major trend in health benefits plays out in years, if not decades,” he said.

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Reference: Amy Goldstein