According to a recent report from the Kaiser Family Foundation and the Health Research & Educational Trust, one in five employers with 200 or more employees say their health plans will exceed the ACA’s excise tax threshold limits that begin in 2018. The survey shows most employers are already planning for the tax, with 13 percent having made changes to their plans to avoid meeting the thresholds. Eight percent of employers say they have already switched to a lower-cost plan.
Steps large employers have taken
Many employers have taken one or more steps to change their plan in anticipation of the excise tax, including:
- Increased cost sharing (64 percent)
- Moved benefit options to account-based plans such as HSAs or HRAs (34 percent)
- Increased incentives to use less costly providers (18 percent)
- Considered offering health insurance through a private exchange (16 percent)
- Reduced the scope of other services (10 percent)
- Eliminated a hospital or health system (nine percent)
- Offered a narrow network plan (seven percent)
Employers are also looking to wellness programs to lower their health care costs. A majority of employers surveyed offer coaching programs such as smoking cessation and weight loss. Thirty-eight percent of employers offering coaching programs provide a financial incentive for employees to participate or complete the program. Among employers offering incentives, 15 percent offer a maximum employee incentive of more than $1,000 for all of their health and wellness programs.
Employee costs increase
These employer plan changes have continued a cost-shifting trend. This year saw an employee out-of-pocket medical cost jump, with the average deductible for an employer health plan increasing nearly nine percent to more than $1,000. This increase far outpaced wage growth and overall inflation. According to the report, over the past decade, the average deductible employees must pay has more than tripled from $303 in 2006 to $1,077.