Employers Bracing for Higher Health Care Costs
Survey indicates cost impact will range from moderate to severe.
Consulting firm Mercer surveyed 791 employers this month about whether they expect Patient Protection and Affordable Care Act (PPACA) rules will cause costs to rise in 2011, and if so, by how much.
According to results of a report released May 20, one-fourth of respondents to the Mercer survey said that compliance with the first round of PPACA mandates will add at least another 3 percent to their projected 2011 plan costs, with about one in ten expecting an additional 5 percent or more. About two-fifths (42 percent) predict a relatively modest increase of 2 percent or less, and 3 percent said their plans were already in compliance and would see no cost increase. The remaining 30 percent of respondents could not estimate the impact.
"Average health benefit cost per employee has been rising consistently at about 6 percent for the past five years," said Tracy Watts, a consultant in Mercer's Washington, D.C., office. "That seems to be employers' threshold of pain. If compliance with health insurance reform pushes the cost increase up toward double digits, employers will be exploring ways to bring it back within their comfort zone."
This blog will present additional findings from the Mercer research next week