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How PPACA has already affected employers

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The Patient Protection and Affordable Care Act (PPACA) might have all sorts of big, complicated effects on employers in the future — and it’s already having effects on employers today.

Analysts at the International Foundation of Employee Benefit Plans (IFEBP) recently put their crystal ball aside long enough to look at what PPACA has done to employers and their benefits’ programs so far.

The benefits group based the results on a survey of the people in its own database and the database of an affiliate, the International Society of Certified Employee Benefit Specialists (ISCEBS). The people in that database tend to work for larger employers with a high level of interest in their benefits programs.

But about 10 percent of the 598 benefits specialists who responded were at employers with 50 or fewer employees, and another 24 percent were at employers with 51 to 499 employees.

For a look at what the benefits specialists are saying, read on.

Dollar Puzzle

1. About 29 percent of the participants said they know how much PPACA is affecting their employers’ costs this year.

Some participants said PPACA is affecting their employers’ health benefits costs. One said PPACA will reduce costs 30 percent this year.

Half of the participants said PPACA is increasing costs less than 3 percent this year, and half said the law is increasing costs more than 3 percent.

See also: Segal sees little to no cost increase under PPACA

A blood pressure check

2. For some, paying for the preventive care and wellness programs associated with PPACA is a headache.

About 21 percent of the employers listed adding PPACA-related wellness benefits, running existing PPACA-related wellness programs, or offering the basic PPACA preventive services package “for free” as one of the top three PPACA-related cost drivers.

See also: Feds tighten preventive services regs


3. Those PPACA fees, assessments, penalties and other extractions of cash can add up.

When listing the top three PPACA-related cost drivers, 18 percent of the participants named the new health insurance provider fee as a top driver, and 33 percent named the Patient-Centered Outcomes Research Institute (PCORI) treatment effectiveness research fee.

See also: PPACA effectiveness center creeps ahead


4. Reporting on what’s going on, and communicating about it, costs a fortune.

About 17 percent of the participants said explaining PPACA to benefit plan participants and potential participants has been a major health benefits cost driver.

Thirty-eight percent said higher spending on complying with the new PPACA reporting, disclosure and notification requirements has been a big driver.

See also: 27 PPACA reporting obligations employers need to know

Crying, bald-headed baby

5. Employers have accelerated the process of giving employees skin in the game.

About 41 percent of the survey participants said their employers have responded to PPACA by increasing plan enrollees’ out-of-pocket spending limits, up from 14 percent in 2013, and 37 percent said their employers have increased in-network deductibles, up from 15 percent.

Only 10 percent said they have increased voluntary, employee-paid benefits options as a result of PPACA.

For years, some benefits experts have talked about employers adopting “defined contribution health plans,” or giving employees a fixed amount of cash that the employees can use to buy their own health coverage. One mechanism for making that transition is to have employees buy their coverage through a private exchange — a multi-carrier enrollment website.

Only 3 percent of the survey participants said their employers now provide coverage for full-time employees through a private exchange, but 12 percent said their employers are considering the private exchange option.

The percentage of employers interested in the private exchange strategy may look low, but, at this point, only 8.9 percent of the employers have a majority of their employees in health maintenance organization (HMO) plans.

The survey responses suggest that private exchange program organizers may soon have a shot at offering the third most popular health benefits strategy, after health account-based programs, which are the dominant programs at 27 percent of the survey participants’ employers, and preferred provider organization (PPO) plans, which are the dominant programs at about 52 percent of the participants’ employers.

See also: Will health exchange roots break through your wall?