Survey Nearly one in three companies exploring ways to avoid ACA mandate

Beth Fitzgerald//May 13, 2014//

Survey Nearly one in three companies exploring ways to avoid ACA mandate

Beth Fitzgerald//May 13, 2014//

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Call it another milestone for the Affordable Care Act.With companies having a better understanding of how Obamacare works, a new survey by non-profit Transamerica Center for Health Studies shows just how many are trying to get around it.

According to the survey, nearly three in ten employers are exploring ways to avoid the Affordable Care Act’s requirement that employers with 50 or more workers offer a health plan next year — with 23 percent considering shrinking their workforce to get around the so-called “employer mandate.”

The number of companies looking to cut workers jumps dramatically – to nearly a third – when only companies with more than 100 employees are totaled.

The survey also found 15 percent of employers are calculating the cost of paying the ACA penalty versus the cost of complying with the ACA. (The penalty, if you don’t remember, kicks in on Jan. 1, 2015, employers with more than 50 employees who don’t offer coverage face a penalty of $2,000 per full-time employee, minus the first 30 full-timers.)

Is this another example of revolt against the act? Not necessarily said Hector De La Torre, the executive director of the Transamerica center.

He calls it business as usual.

“(Most companies are) looking to tinker around the edges to see if they can reduce their exposure,” he said, noting nearly all already offer health insurance of some type.

And while the survey found 15 percent of companies anticipate their worker headcount falling, it also found 28 percent of businesses expect their workforce to increase.

Asked why 28 percent of the employers surveyed see the ACA increasing their employee headcount, De La Torre said that includes employers in the health care sector whose business will increase as the ACA covers more people and pours additional revenue to the health care system. But he said it also reflects an improvement in employer knowledge about the ACA, and a decline in the uncertainty that has swirled around the law since it was enacted in 2010.

In Transamerica’s first benchmark survey in 2013, study, only 37 percent of employers reported being very informed about their options — while in the current survey, 69 percent said they are very informed.

“Now that they know more about the ACA, it has become more of a question of what do they expect for their business going forward,” De La Torre said. As fear of the ACA subsides employers are focused on “business as usual” and making headcount forecasts based on “what they expect for their business going forward. “

Joel Cantor, the director of the Rutgers Center for State Health Policy, said you can not read too much into surveys.

“It is important to take survey reports of employers’ expected responses to the ACA with a grain of salt,” he said. “Rising health care costs and other changes the health care market that pre-date the ACA are putting a lot of pressure on employers to make adjustments to their hiring and health plan offerings. In light of these trends, it is difficult to infer the extent to which employers are making plans that would have been any different without the ACA.”

The survey also found that a significant number of small businesses are not well informed about the Small Business Health Options Program or SHOP, whose full implementation was delayed until 2015.

Next year employers with fewer than 50 employees will be able to shop online for coverage for their workers from a wide range of plans; this year the employer can only chose one plan for the entire workforce, and that has severely limited the popularity of SHOP.

Cantor was not surprised by this.

“Low awareness of the SHOP is not surprising, since its implementation has been delayed,” he said. “There has been little promotion of the SHOP since it doesn’t exist yet in most places.”

The survey found that 64 percent of employer plans to take some action in response to the ACA with 19 percent planning to change their plan’s options; 17 percent planning to tighten requirements for employees to be eligible for health care benefits, and 17 percent planning to switch to a different insurance company.

The ACA doesn’t require employers to cover dependents, which led to concerns that employers would drop dependent coverage. However, the survey found that 10 percent of companies plan to eliminate dependent coverage for their health plans, while nine percent plan to add dependent coverage.