Employers slow to act on health reform

Even though employers expect the U.S. Supreme Court to strike down at least some of the 2010 health reform law later this month, few are actually doing any contingency planning.

Forty-five percent of employers surveyed by the International Foundation of Employee Benefit Plans said they are taking a “wait and see” approach to the fate of health care reform. Not only are they waiting for the Supreme Court to hand down its decision, but more than half taking this approach say they’re eyeing the outcome of the November elections, too.

Fewer than 30 percent of employers have had detailed discussions or drawn up scenario-based plans, according to the survey. And 26 percent of employers say they have had general discussions about how changes to the law could affect their health benefits plans.

“This is the calm before the storm, if you will,” said John Gause, president of Indianapolis-based Apex Benefits Group Inc.

Gause expects most employers to wait until after the court ruling and after the outcome of the November presidential election before solidifying any changes to their health benefits strategies. Most of the provisions of the Patient Protection & Affordable Care Act take effect in 2014.

“Employers are really going to say, ‘OK, it’s here or it’s not here,’ and they’re really going to look at that point,” Gause said of late-2012 and 2013. “And they’re going to look for direction from whoever their advisers are.”

On the whole, employers would like to see the Supreme Court toss the entire law on the scrapheap, according to the foundation’s survey. Fifty-eight percent prefer that outcome, compared with 27 percent that want the full law to stand and 14 percent that want some things to stay and some to go away.

However, employers generally do not expect to get their wish. Two-thirds expect that the Supreme Court will leave the law intact except for the “individual mandate”—a requirement in the law that all Americans except some young adults acquire health insurance.

If the entire law were to be struck down, legislators on Capitol Hill are preparing bills to reinstate some of its most popular provisions. Among the employers surveyed, not one of the provisions received majority support for reinstatement. The closest was the increased tax breaks for wellness programs, which garnered support from 33 percent of employers.

However, employers do think their employees would like to see some of the law’s provisions stand.  Most popular, in the employers’ estimation of their workers’ views, is the law’s requirement that employers cover their workers’ adult children up to age 26. Fifty-eight percent of employers think their workers want to see that rule remain.

And roughly one-third of all employers think their workers also favor the law’s elimination of all pre-existing condition exclusions and forbiddance of co-pays for preventive health care services.

The survey results, released June 5, were based on responses from 1,027 U.S. employers or multi-employer groups. The people responding were administrators of the companies’ health benefits plans.