Employers Not Seeing Uptick in Health Benefits Buying; AIS Newsletter Examines Why

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The average number of workers enrolled in a company-sponsored health plan remains flat, despite the reform law’s mandates that all full-time employees be offered insurance. The Sept. 1, 2014, issue of Atlantic Information Services’s Health Plan Week examines why.

Despite many industry observers who expected that the Affordable Care Act’s (ACA) individual mandate would spur more individuals to take advantage of employer offerings and avoid being penalized, and a recent announcement by Wal-Mart Stores, Inc. of a rise in the number of its employees buying company health insurance, data show that employees have not shifted in great numbers to employer plans from 2013 to 2014. The Sept. 1 issue of Atlantic Information Services, Inc.’s Health Plan Week (HPW) examines why.

In one study, benefits consulting firm Mercer conducted a survey of more than 700 employer clients (26% with fewer than 500 employees, 49% with 500 to 4,999, and 24% with 5,000 or more) which found that the average number of workers enrolled in a company plan for 2014 was 69.3%. This is only slightly above the 69.1% level of 2013. And when asked to project to 2015, the survey respondents told Mercer they expect a very small increase in employee uptake to 69.8%.

One possible explanation for the unexpected trend is that employers are tracking hours more closely to meet the ACA’s requirement that full-time workers be offered insurance by their employers. “This is all about managing employees better. If they are supposed to be working 25 hours per week and end up working 31,” that has an impact on their insurance status under the Affordable Care Act, Beth Umland, Mercer’s director of employer research for health and benefits, tells HPW.

Another possibility is that some employees opt out of employer-offered health benefits, for a variety of reasons. “The typical opt-out rate is 15% and that is typically people who have coverage elsewhere, through their spouse, through their parents. So they don’t need their employer’s coverage because they have other coverage,” Tracy Watts, senior partner and national health care reform leader at Mercer, tells HPW.

Employees also might not know their options when it comes to obtaining health insurance. “I know of one employer that offered a private exchange last year but employees did not know,” says Paul Fronstin, director of the Employee Benefit Research Institute’s Health Research and Education Program. “The name of the exchange was not used, and workers would only know that they have more choices, from three plans to 20 to 25 now.”

Visit http://aishealth.com/archive/nhpw090114-01 to read the article in its entirety, which includes analysis from other industry observers, including Shari Davidson, a vice president at the National Business Group on Health.

About Health Plan Week
Published since 1991, the 8-page weekly newsletter Health Plan Week provides timely, objective business, financial and regulatory news of the health insurance industry. Coverage includes new benefit designs and underwriting practices, new products and marketing strategies, mergers and alliances, financial performance and results, Medicare and Medicaid opportunities, disease management, and the flood of reform-driven regulatory initiatives including medical loss ratios, exchanges, ACOs and myriad benefit design changes that are mandated. Visit http://aishealth.com/marketplace/health-plan-week for more information.

About Atlantic Information Services
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at http://AISHealth.com.

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Jill Brown, Executive Editor
Atlantic Information Services
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