Most employers haven’t addressed PPACA requirementsNews added by Benefits Pro on July 11, 2012

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By Amanda McGrory

Most employers waited for the Supreme Court’s ruling before responding to health care reform provisions that are to be enforced in 2014, according to a survey of 4,000 employers conducted by Mercer, a global human resources consultancy.

Although 40 percent of respondents plan to begin taking action, 16 percent of respondents are waiting until after November’s elections. Health care reform still has its challenges in this political environment, but employers should stay on track in their strategies to comply with the law, or penalties could be enforced, Mercer maintains.

While the new requirements for 2012 and 2013 require quick implementation, those that go into effect in 2014 will have broader implications for many employers. Of health care reform’s provisions, 28 percent of respondents say providing coverage to employees working an average of 30 or more hours per week will present a significant challenge for their organizations.

“Employers with large part-time populations, such as retailers and health care organizations, are faced with the difficult choice of either increasing the number of employees eligible for coverage or changing their work force strategy so that employees work fewer hours,” says David Rahill, president of Mercer’s health and benefits business. “With the average cost of health coverage now exceeding $10,000 per employee, a big jump in enrollment is not economically feasible for many employers.”

Another 29 percent of respondents say the requirement to auto-enroll newly eligible employees in a health plan is also a significant challenge, considering that other provisions of the law limit the amount of health plan costs employers can pass employees through higher premiums or deductibles. But most respondents at 47 percent are concerned about the excise tax on high-cost plans, which are expected to go into place in 2018.

“Employers already struggling with annual health care cost increases of double or triple general inflation are determined to avoid this tax,” says Sharon Cunninghis, U.S. leader of Mercer’s health and benefits business. “We’ve been seeing a lot more interest in cost-saving measures, such as consumer-directed health plans and employee health management, since the tax was proposed.”

The survey also finds that 52 percent of respondents agree that health care reform has motivated them to pursue more aggressive health benefit cost-management strategies, and this trend is expected to continue. In fact, 54 percent of respondents plan to be more aggressive when it comes to managing plan costs now that health reform has been upheld. Although 41 percent of respondents do not plan to do so, it is because they were already aggressively managing expenses.

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