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Meaningful Health Care Informatics Blog

Jun 12 2011   9:03AM GMT

A survey showing a stronger reaction to healthcare reform post 2014 from employers and employees



Posted by: RedaChouffani
Employer, Employer health and human capital, ESI, healthcare reform, Insurance companies, Payer

In June 2011, Mckinsey &Company released a report that discusses the potential outcome of the US health care reform bill that passed this year post 2014.  The report discusses the potential shift away from employer-provided health insurance at a much higher rate than initially anticipated by the Congressional Budget Office (CBO).

While the part of the law mandates that all individuals — regardless of their medical status — get insured, this law won’t take effect until 2014. The report suggests that most employers will need to pick between either dropping coverage completely for their employees, who would potentially seek government subsidies, or else maintain their current model.

The general findings of the 1300 employers surveyed during early 2011 suggests the following:

Over 30% of employers will discontinue offering ESI in their company.  For those groups with less than 50 employees, they will not be subject to the penalty; however, when you look at the rising premiums, other employers recognize that the penalty is significantly lower than the potential, looming costs with which they will be faced.

The report also states that some of the surveyed employees would be ok with an employer dropping ESI, though about 60% of them would expect an increase in compensation.

The bottom line is that all companies, small and large, must assess the post-2014 ROI of their benefits packages.  While organizations need to ensure that retaining employees and attracting talent is a top priority, they will also need to identify the best way to stay profitable and reward those employees while recognizing that there is a significant shift ahead in how ESI is provided in the future.

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