The recent decision by the Obama administration to defer the “employer mandate” until 2015 has virtually no impact on the vast majority of “large” employers currently offering health insurance programs to their employees:
- Most employers currently charge employees less than 9.5% of salary for coverage;
- Most coverage currently being offered meets the definition of “minimum actuarial value”
- Most employers were planning to continue to “play, “not “pay”
So for almost all large employers, the mandate didn't mean a thing… so its postponement doesn't mean anything, either. Essentially, nothing has changed… including the challenge ahead:
- Premiums will continue to go up;
- New taxes, fees and regulations will add to the cost burden;
- Providers are consolidating and shifting more and more cost to private insurance plans;
- The obesity and chronic disease epidemic continues unabated;
Which means that employers need to remain focused on developing and executing a clear and focused strategy to manage healthcare costs in the new world of the Affordable Care Act.
For most employers, these strategies should still fall into one of three major categories:
- “Pay”: Transfer responsibility for providing coverage to publicly subsidized coverage through the public exchanges. This strategy is generally reserved for small business and certain non-profits and other lower-paid industries (the postponement may make this option even more attractive).
- “Play Passive”: Transfer responsibility to employees through a hands-off cost management approach. Utilize private exchanges to facilitate a defined contribution strategy where employees assume responsibility for choice and a growing burden for future cost increases.
- “Play Active”: Aggressively manage costs through self-insurance, incentive based contributions; consumerism and leveraging higher allowance for outcomes based wellness plans.
Bottom line? Don’t get distracted. We have to expect that there will be many more twists and turns in the road ahead. If you’re an employer responsible for navigating the new world of healthcare, you have got to stay focused on implementing your new strategy—by investing the time and the energy to chart the best course ahead for your organization. Do that and you will stay ahead no matter how the rules of the game are changed.