Weekly Wrap: Employers Aren’t Dropping Health Care, But Cost Is a Concern

You don’t hear a lot about health care reform these days, and that’s probably because a number of the provisions don’t kick in for a few years.

But that doesn’t mean employers aren’t thinking about it.

I was reminded of this when the latest health care survey from HR consulting giant Mercer popped into my mail box earlier this week. TLNT contributor and health care expert Fran Melmed wrote about it over at her Free-Range Communication blog, and she did a great job breaking down the key points. Here are the highlights of the survey from her perspective:

  • Only 2 percent of the 894 participating employers say they’re “very likely” to drop medical insurance; 6 percent say they’re “likely to do so.
  • Employers expect that compliance with 2014 changes will drive up their costs by 2 -5 percent; some 15 percent of employers say their plan is already in compliance
  • The biggest concern of employers remains the excise or “Cadillac tax” for richer benefits plans; in response to this concern, 92 percent of employers are likely to rely on programs that will “encourage more health-conscious behavior” as part of their long-term cost-management strategy.
  • Employers are also considering alternative approaches to cost containment: carve-outs of voluntary benefits, reduction in dependents’ coverage and migration to a defined contribution plan; retailers will transform their staffing arrangements to have fewer employers working the 30 hours that stipulate mandatory health coverage.

Employers still see value in health care coverage

The good news here is that despite the worries that many employers would simply drop their health care coverage, pay the penalty, and push employees into getting it from health care exchanges, that doesn’t see to be where employers are heading — so far.

“Employers have spent the past year studying the new law and developing strategies to deal with the increased costs and administrative burdens,” said Beth Umland, director for research for health and benefits for Mercer. “But they don’t seem to have changed their minds about the value of continuing to offer their employees health coverage.”

The survey also notes that the excise tax — the No. 1 concern for employers — provides a “strong incentive to keep health care costs down. “And, this means that companies have a strong incentive to “add or strengthen programs or policies to encourage more health conscious behavior.” Mercer found that 54 percent said that employers are very likely to do this, while another 38 percent indicated that they likely would.

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There’s a lot more in the Mercer survey about possible strategies that employers are looking at to hold costs down, and they’re worth digging into if your organization, like so many,  is working to get a better handle on your health care costs moving ahead.

Fran Melmed, as always, had this last bit of insight on the whole health care issue:

As employers weigh these alternatives and set their strategy, communications and employee involvement will play a key role in their ultimate effectiveness. So too will an employer’s readiness to involve themselves in community and public health discussions — particularly if they want to gain traction when it comes to health-consciousness. Most of our decisions about what we eat and whether we exercise happen outside of work and are influenced by design and policy.”

Coping with working at home

Of course, there’s more than health care reform in the news this week. Here are some other HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of HR and talent management. I do it so you don’t have to.

  • How to deal with working at home. Take it from me: working at home is a bit of a mixed blessing. It’s not for everyone, and the lack of a structured workplace environment can be hard to get adjusted to. Workplace columnist Cindy Krischer Goodman of The Miami Herald understands this all too well, and this week she dug into some of the ways you can make it work. “National studies indicate that the ranks of the self-employed have increased during the economic downturn,” she writes, “with most one-man shops setting up from home. At the same time, U.S. Census data show an increasing number of companies are permitting workers to set up offices at home — 61 percent more employees considered home their primary place of work in 2009 than in 2005. Beyond those making an initial transition, workers at home for years find themselves struggling to stay motivated during the economic slump.”
  • Stressing out in Arizona. Workers have been struggling everywhere for the better part of there years (at least), and this survey in Arizona shows just how much so. According to the Arizona Republic, “Nearly three out of four middle-class families have experienced a mental or physical health issue associated with financial stress over the past year, according to the First Command Financial Behaviors Index released in June. The index, a monthly survey of 1,000 people nationwide with annual incomes of at least $50,000, indicated that the common health- related complaints among the middle class included difficulty falling asleep, changes in weight, anxiety and lower energy levels. (And) many middle-class Arizonans still caught in the downturn have fewer dollars to do what they used to take for granted – taking care of their health and their families.”
  • Are unions the great equalizers? The website Salon is pretty liberal, but this week it spent some time getting into the debate over what benefit a union presence might have in higher wages for all employees. “The reasons why some people earn considerably more than others are perennially debated … A new study published in the American Sociological Review, however, claims we are missing a factor key to explaining growing wage inequality: the decline of unions. ‘Union membership in America has declined significantly since the early 1970s, and that plunge explains approximately a fifth of the increase in hourly wage inequality among women and about a third among men,’ argue study authors Bruce Western, a professor of sociology at Harvard, and Jake Rosenfeld, a professor of sociology at the University of Washington. ‘Our study underscores the role of unions as an equalizing force in the labor market.

John Hollon is Editor-at-Large at ERE Media and was the founding Editor of TLNT.com. A longtime newspaper, magazine, and business journal editor, John has deep roots in the talent management space. He's the former Editor of Workforce Management magazine and workforce.com, served as Editor of RecruitingDaily, and was Vice President for Content at HR technology firm Checkster. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices, including for the popular Fistful of Talent blog. Contact him at johnhollon@ere.net, connect with him on LinkedIn, or follow him on Twitter @johnhollon.

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