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One Year Later, Companies Still Seeking Answers to Health Care Reform

Issues include developing new ways to deliver and manage health benefits and keeping current with legislation and administration requirements. Are employers keeping up, or waiting to see what unfolds?

May 31, 2011
Related Topics: Medical Benefits Law, Benefit Design and Communication, Health and Wellness, Compensation

More than a year after the passage of health care reform and with several court challenges still ahead, health benefits experts say employers appear committed to offering health care benefits for employees. Yet employers are searching for help with implementing the new legislation and what they should offer.

Pearce Weaver, senior vice president at Fidelity Consulting Services in The Woodlands, Texas, says it’s crucial for employers to closely follow changes to the Patient Protection and Affordable Care Act, which was signed into law in March 2010, while also conducting financial and other impact analyses relating to health care reform.

“Employers feel they still have an obligation to continue to offer benefits, because they truly believe the employer delivery system is efficient and effective,” Weaver says. “Our clients are watching closely to see what happens when the legislation and administrative requirements are finalized, however, most are determined to get through it.”

A survey released in early 2011 by the Midwest Business Group on Health and co-sponsored by Workforce Management and sister publication Business Insurance found that 53 percent of all employers and 67 percent of large employers do not plan to drop health benefits, while 22 percent said it is likely they would consider dropping them. The survey, which was conducted between Nov. 29 and Dec. 15, 2010, drew responses from 430 employers, of which 43 percent have more than 500 U.S. employees.

Steve Raetzman, a partner with consulting firm Mercer in Washington, D.C., notes that health care reform legislation will force employers to deal with the complexities of administration, compliance and employee engagement in a dynamic environment.

“Employers who don’t offer health plans, as well as large and administratively complex organizations, need to get up to speed and decide what they are going to do,” Raetzman says.

Raetzman says employers will need to create reward packages that attract and retain workers, meet new communication and administration requirements and identify new cost savings within their health care plans.

Health care reform legislation is so broad that employers are working on the immediate needs, says Karen McLeese, vice president of employee benefit regulatory affairs for CBIZ Benefits & Insurance Services Inc. in Cleveland.

“Those who have the resources would like to budget for the long-term, but that’s difficult because it’s a long bill that offers little detail and some provisions that have enormous impact are covered in three lines,” McLeese says.

McLeese senses the frustration among employers.

“They provide health care for retention purposes, but it’s not their business and the business takes precedence. They are seeking partners to help them navigate through the legislation,” she says. Many are simply “dealing with what they have to deal with right now.”

Terri Seefeldt, area sales manager with Rogers Benefits Group, a general agent for employer group health insurance in Orlando, Florida, says most employers still don’t grasp health care reform’s cost and complexities.

“When I present information about health care reform to my clients, they look like they’ve been hit by a truck,” Seefeldt says.

Columbus, Ohio-based Zangmeister Center provides health care to cancer patients. Yet executive director Glenn Balasky admits his company’s expertise doesn’t lie in delivering health care benefits to its 140 employees.

“We are looking at our options, preparing for future increases and finding partners to keep us informed about the new regulations,” he says.

Balasky says the health care overhaul was necessary.

“There are a lot of flaws, which we see daily as a provider,” Balasky says. “However, we are struggling to understand how it will play out for us as a provider of health care, and how it will impact our own plans.”

Bill Hutter, CEO of Columbus, Ohio-based professional employer services firm Sequent Inc., says money will be a motivator for employees as they look at plan design under health care reform regulations.

“Businesses have to realize that we have two generations of employees who have grown up with the idea of credit card medicine and copays; the only answer for businesses is to stop being the parents and move to consumer-driven plans,” Hutter says, adding that most of his clients aren’t ready to make that leap.

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