f your company is searching for a health insurance carrier, you’re not alone. A 2010 J.D. Power and Associates’ Employer Health Insurance Plan Study reported that many employers are dissatisfied with their plans. The average overall satisfaction rating was 611 out of a 1,000 point scale, which was lower than a previous survey’s results.
Much of the dissatisfaction stems from servicing issues. Nearly 80% reported having at least one problem with their carrier over a one-year period.
“Given the high incidence of issues requiring employers to contact their carrier, the efficiency of the problem resolution process is a highly critical aspect of their overall experience,” said Rick Millard, senior director of the healthcare practice at J.D. Power and Associates. “More than 80% of employers that contact their carrier do so because they have a problem or issue to address, and for those who experience a problem, its resolution becomes the most important aspect of their overall carrier experience.”
Those experiences, coupled with the enactment of the Patient Protection and Affordable Care Act (PPACA), have employers searching for options. The PPACA is set to impose a hefty tax on “Cadillac” plans that provide generous coverage, and offer tax credits only to lean policies, which could force employers to consider dropping coverage altogether and place thousands of workers into the exchange pool.
But many employers will likely continue some coverage, as insurance expenses have traditionally been tax deductible and dropping coverage may increase Social Security and Medicare payroll taxes. Erin Shields, a spokesperson for the group of senators who crafted PPACA, expects the law to encourage companies to maintain some coverage. “It is clearly cheaper for employers to continue providing coverage,” she said.
According to a Milliman 2010 study of roughly 60 health insurance carriers, insurers are already taking steps to reduce plan costs. In fact, 66% of respondents plan to strengthen their self-insurance options in order to adjust to a changing landscape. And, although more than half indicated they would not reduce employee compensation levels, roughly 25% admitted they may reduce the number of covered employees.
Employers may be leaning more heavily towards self-funded plans in light of increased uncertainties about health care. According to a Kaiser Family Foundation survey, 59% of covered workers were already enrolled in self-funded plans.
The health insurance landscape is changing at a rapid rate. Much of the PPACA’s impact doesn’t hit employers until 2014, so expect to see a lot of plan changes, and hopefully improved service. This is a good time to express any dissatisfaction with your carrier and leverage the upcoming legislation to your advantage.