Survey: Health Reform Leading to Changes for Large Employers

August 18, 2010

Many of the biggest U.S. companies are removing spending limits from their employees’ health plans and taking other steps to comply with the new healthcare law, according to a report released on Wednesday.

Most of the companies surveyed also plan to shift more costs to employees in an effort to rein in rising healthcare spending, according to the report.

The National Business Group on Health based its findings on a survey of 72 of its member companies in May and June. Members include many of the largest U.S. employers, including Wal-Mart Stores Inc and General Electric Co, but the report does not say which companies were surveyed.

The debate on healthcare reform, especially over whether it will increase costs for individuals and small businesses, has been a significant component of the November midterm elections in which Democrats are fighting to maintain control of Congress.

The law passed this spring includes several provisions that employer-based health insurance plans will have to abide by once the rules take effect on Sept. 23.

The survey found that 70 percent of the companies will have to eliminate lifetime dollar limits, or a cap on the amount an insurer will pay for covered expenses, while 13 percent will no longer be allowed to deny coverage for children with costly pre-existing medical conditions. About a quarter will have to end annual limits on benefits.

The law also prompted some companies to avoid tinkering with benefits too much. About a fifth of the companies scaled back changes to their health plans to avoid losing grandfathered status and having to follow more of the law’s new rules, while another fifth expected to make no adjustments at all.

New plans or those that lose grandfathered status must cover preventive services such as mammograms and colonoscopies at no additional cost to patients. They also must allow access to a pediatrician or obstetrician without a referral.

Just over half of the companies planned to go ahead with plan changes for 2011 anyway.

These figures could change, since the survey was conducted before the Department of Health and Human Services put out final rules in June on how to maintain grandfathered status. Plans that significantly reduce benefits or increase costs beyond medical inflation will be considered a new plan.

“While the health reform law has forced employers to evaluate their health care benefit strategies and decide whether to comply with the law or lose grandfathered status, they haven’t lost sight of the fact that controlling rising costs remains one of, if not their highest, priority,” Helen Darling, president of the National Business Group on Health, said in a statement.

The report suggested the law could spur higher costs, which the companies budgeted to grow by nearly 9 percent on average in 2011.

Most employers surveyed plan to shift more of the premium costs to employees next year. Other popular ways to reduce costs are wellness programs and consumer-directed health plans, which give enrollees more responsibility for how they spend their healthcare dollars.

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