Employers planning moderate changes in health care plans

Employers are planning only moderate changes in their health care plans for 2012, according to a survey of 368 midsize to large companies. The survey, conducted by Towers Watson, a global professional services company, also found that while employer health care costs will rise at a lower rate during 2012 compared with 2011 (5.9% versus 7.6%, respectively), the majority of employers (88%) are planning to take steps to control their costs and avoid the impact of health care reform's federal excise tax.
About half the companies (45%) plan to rethink their long-term health care strategy during 2012. Many are uncertain how they will respond to the impact of state-based insurance exchanges in 2014.

Over two-thirds (71%) of the companies indicated that they will continue offering health care benefits to their active employees through 2014. Among the remaining 29%, most are unsure about whether they will continue sponsorship or offset the loss of health care benefits (if they exit) with an equivalent salary increase. For retirees, more than half of employers (54%) that offer health care benefits plan to discontinue them for both pre-65 and post-65 retirees.
One of the driving forces behind significant health care design changes and cost shifting is health care reform. A majority of employers (53%) are confident that health care reform will be implemented within the anticipated timeline, but 70% of employers are skeptical that health insurance exchanges will provide a viable alternative to employer-sponsored coverage for active employees in 2014 or 2015.