Market Strategies International


Many Companies Intend to Drop Employee Coverage in 2014 as Health Care Reform Takes Full Effect

10 percent of U.S. workers could lose employer-sponsored benefits

In the wake of the passing of the Affordable Health Care for America Act, companies across the country are reviewing the costs of continuing to provide employee health care benefits and considering their options. Indications point to a possible net 10 percent reduction in access to employer-sponsored health benefits as of January 2014, according to the results of Health Care Reform 360, a new national study by Market Strategies International, the highly-regarded global market research and consulting firm.

"The results are eye opening and could severely impact a sizeable number of US workers and their families," said Susan McIntyre, senior vice president in the company's Healthcare Research Division. "While our study design does not allow us to estimate a precise number, we're talking about potentially 10 million people no longer having access to health benefits through their employers in 2014. A significant number of employers are telling us that, with health care reform, it may not benefit them competitively to offer employee health care benefits. The reality is that companies of all sizes are reviewing their options and considering reductions."

Some notable findings regarding 2014 employer health benefits intentions:

Among companies included in the study and currently offering health care benefits (covering 92 percent of all workers):

  • 76 percent will continue to do so
  • 15 percent will offer coverage to some full-time employees
  • 9 percent will stop doing so

Among companies currently not offering health care benefits (covering 8 percent of all workers):

  • 28 percent will begin to offer them in 2014
  • 19 percent will begin to offer coverage to some full-time employees
  • 53 percent will not begin to offer health care benefits

Taken in total, there could be an estimated 10% net decline in access to employer-sponsored health benefits as of January 2014. (13 percent of U.S. workers will lose employer-sponsored benefits; 3 percent will gain employer-sponsored benefits.)

McIntyre added, "Many small and large firms see the availability of coverage to employees through Exchanges as the potential to exit the health benefits arena without leaving employees lacking in coverage options. For some large firms, in particular, there is a desire to pay to walk away.

"Beyond the planned exodus by some firms is the potential for other companies to drastically restructure their workforce," said McIntyre. "There will be strong economic and competitive forces driving some employers away from full-time employees, in favor of more seasonal workers, part-time workers or contractors. Looking at beginning or increasing off-shoring is another option."

The Health Care Reform 360 study offers additional significant insight into employers' plans for health care coverage as well as current levels of familiarity with the law and attitudes and concerns. Full results include a segmentation of US firms on various aspects of coverage intentions and Health Care Reform.

About the Study

Market Strategies International's Health Care Reform 360 study is a multi-dimensional, multi-phased research program that illuminates health care reform attitudes, awareness, perceptions and behaviors among multiple health care stakeholder groups. For this study, Market Strategies conducted a Web survey between October 27 and November 8, 2010 using the Research Now Web panel with a national sample of 1,065 adults. Qualified respondents were employee health benefits decision makers or influencers at companies with at least 2 FTEs. The sample was stratified by firm size (number of FTEs) and health benefits status (offer/not) and weighted to the overall U.S. employer benefits market based on population estimates provided in the 2010 Kaiser Family Foundation HRET Employer Health Benefits Survey.

For more information about obtaining the full study, contact:

Susan McIntyre
Senior Vice President, Healthcare Division

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