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Life Health > Health Insurance > Health Insurance

The Catch: PPACA Jitters

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About 27% of U.S. employers say they already have analyzed the cost of complying with the Patient Protection and Affordable Care Act of 2010 (PPACA) and other new health system change laws and regulations.

More than 30% say PPACA has increased health benefits costs by more than 2%, and 15% say PPACA has increased health benefits costs by more than 5%, according to consultants in the New York human capital practice at Willis Group Holdings P.L.C. (NYSE:WSH).

Willis surveyed about 2,300 U.S. employers of all sizes.

The participating employers said the most expensive PPACA provision that has already started to take effect is the one requiring employers that offer dependent coverage to treat children up to age 26 as dependents.

The provision that eliminates lifetime benefits limits and phases out annual benefits limits is almost as costly, employers told Willis.

About 22% of the employers said the young adult coverage provision has increased their costs by more than 2%, and about 19% said the benefits limit provision has increased costs by more than 2%.

The cost of a provision eliminating co-payments and deductibles for preventive services may be exceeding the 2% threshold at 15% of the employers, and the cost of removing pre-existing condition exclusions for children under age 19 may be exceeding the threshold at 13% of the employers.


The large employers that participated in the latest Towers Watson/National Business Group on Health survey are getting nervous about 2014.

Towers Watson & Company, New York (NYSE:TW), and the National Business Group on Health (NBGH), Washington, surveyed 512 U.S. employers earlier this winter. Each participating company had at least 1,000 employees.

Many major provisions of the Patient Protection and Affordable Care Act of 2010 (PPACA) are scheduled to take effect in 2014.

Only 3% of the employers that participated in the employer said they are very or somewhat to drop health coverage for active employees in 2014 or 2015 without providing a financial subsidy.

But 45% of the employers said it is very to somewhat likely that they will offer for some other employees but encourage others to buy coverage through the new health insurance exchanges, or Web-based insurance supermarkets, that PPACA is supposed to create.

Only 23% of the employers said they are very confident that they will continue to offer health care benefits 10 years from now, down from 73% in 2007.

The survey team found that employers expect total health care costs per employee to increase 5.9% this year, to $11,664.

The expected rate of increase is up from 5.4% in 2011.

Employees’ share of the costs is increasing 9.3% this year, to $2,764.

Enrollment in health plan programs that incorporate health savings accounts or health reimbursement arrangements has increased to 27%, from 15% in 2010.


Voluntary benefits brokers and carriers are expecting this year to be a good year for sales.

About 88% expect the number of groups acquired to increase this year, and about 30% expect the number to “increase a lot,” according to voluntary market analysts at Eastbridge Consulting Group Inc., Avon, Conn.

The overall Eastbridge voluntary market confidence index increased to 99.7%, from 98.4 six months ago, the analysts say.


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