Most employers expect Obamacare to hike their health insurance costs and are responding by boosting their workers’ share of the cost, according to a Wednesday survey.
Eighty-eight percent of companies expect Obamacare itself to increase the cost over providing health care to employees, according to a study by the International Foundation of Employee Benefit Plans which questioned close to 700 human resources and health benefits professionals.
So far, 54 percent of businesses think Obamacare’s effect on their company has been either somewhat or very negative; 66 percent expect Obamacare to affect them negatively in the future.
And while fewer companies took action to contain growing health care costs in 2013, before Obamacare regulations fully kicked in, those numbers have doubled in some categories for 2014. An increasing proportion of companies are shifting a larger proportion of their growing health care costs to their employees instead — in almost every way possible.
A third of companies reported that they’re upping out-of-pocket limits for their employees’ health coverage — an often-overlooked component of health care plans that can prevent budget-crunched customers from actually using their health insurance. (RELATED: Report: Employee Health Care Premiums Boosted Under Obamacare)
Thirty percent of companies reported increasing their employees’ share of premium costs; 30 percent are boosting their in-network deductibles for employee health plans; 24 percent are upping co-payments or co-insurance for primary care physicians. Another 20 percent are increasing the employee cost of providing health insurance to employees’ dependents and yet another 19 percent are increasing the share of prescription drug costs that their workers pay themselves.
The boosted costs for employer-provided coverage due to the health care law is likely to irk customers who have avoided the Obamacare exchanges themselves. And with more Obamacare taxes — including a costly 40 percent excise tax on high-cost, “Cadillac” health plans — are set to hit harder in upcoming years.
In 2011, just 11 percent of companies had taken action to avoid the Cadillac tax, which will hit employers in 2018. But that grew to 25 percent of businesses by 2014, and is likely to continue to grow as the hefty tax grows closer.
But even in the face of boosted costs, many industry experts have denied that most employers will take drastic measures to control costs — such as ceasing to offer health insurance to employees at all. And the survey continued to find that an overwhelming majority of businesses intend to keep their employer-provided health coverage — after all, it’s almost a given, as 150 million Americans get their health insurance from their job.
But while in 2014, 74 percent of employers responded that they ‘definitely will’ keep their employee health coverage for full-time employees, that number drops drastically when businesses consider a few years down the road.
Just 22 percent of employers think they will continue to offer coverage to their workers five years from now, according to the survey. Another 51 percent believe they are still very likely to offer health coverage. The drastic drop across the next several years could indicate that businesses are expecting that either the Obama administration or the next president will move to drop the employer mandate entirely.
After two separate delays, the employer mandate is scheduled to hit all businesses with 50 or more employees in 2016. But a growing number of experts and Obamacare supporters are clamoring for the repeal of the controversial requirement — and one of the backbones of Obamacare.