What California employers tell us is most important to them
1. Controlling health care costs
2. Using health benefits to help attract and retain the right employees
3. Managing health reform regulatory risks
4. Keeping employees healthy and productive
Group Health Plans in California 2010
Growth in the average total group health benefit plan cost per California employee, which had slowed in 2009 to 5.5%, picked up steam, rising 6.9to $9,562, the biggest increase since 2004. However, California employers managed to hold their actual cost down by making changes to plan design or changing plan vendors. The average individual PPO deductible rose by about $100. California employers dropped HMOs, which were more costly than PPOs this year.
Consumer-Directed Health Plan Enrollment Jumps Up
Enrollment in CDHPs offered by the California's employers jumped sharply in 2010. Overall enrollment in high-deductible, consumer-directed health plans (CDHPs) grew to 11% in 2010. CDHP enrollment has risen by two percentage points each year since 2006 in California. CDHP enrollment rose fastest this year among California's largest employers- a group that tends to set trends for California small businesses.
California Employees Highly Value Health Benefits
90% of California employees who receive health benefits via their employers say that these benefits are as important as getting a salary.
How Health Care Reform Requirements Will Affect California Employers
1. Dependent eligibility to Age 26 (2011)
2. Shared responsibility rule (2014)
3. Affordability rule (2014)
Health Reform Cost for California Employers
While some California employers say that the Affordable Care Act requirements generally taking effect for 2011 - extending coverage eligibility to dependents up to age 26 and removing lifetime benefit limits - will have no effect on their cost in 2011, nearly as many estimate that it will raise cost by 5% or more. Actually, reform will push up cost by 2% or less in 2011.
Retain Grandfathered Health Plans Status or Not
The new health care reform law gives employers a choice: If they avoid making certain changes to their health plans - such as raising employee coinsurance requirements - their plans will be "grandfathered" and thus exempt from a number of new cost-sharing and coverage mandates. About 53% of the employers surveyed think all their plans will retain grandfathered status through 2011.
California Employers Concerned About Health Plan Excise Tax
The excise tax on high-cost plans is the reform requirement that concerns the most employers. Starting in 2018, health benefit coverage that costs more than $10,200 for an individual employee or $27,500 for dependent coverage will be subject to a 40% excise tax. Some employers offer high-cost plans because a generous plan is part of their attraction and retention strategy; some have high-cost plans because they have an older or less healthy workforce or are located in a high-cost area. In either case, a 40% excise tax on health benefits could prompt a significant change in health benefit strategy.
What would happen if California employers opted out of health benefits?
Employer frustration has been percolating for a long time. Various arguments -- both for and against -- recur in the debate over whether employers should sponsor health coverage. On one hand, healthier employees are more productive, and comprehensive health coverage is critical to recruiting and retaining better employers. But on the other, health care's relentless cost inflation renders American businesses that offer coverage less competitive than their domestic counterparts that don't. Similarly, they are less competitive than international firms whose employees' coverage costs significantly less.
California Group Health Plan Overview
There are 2 primary types of health benefit plans - Fully-Insured and Self-Funded and newer hybrid plans like Consumer Directed Health Plans (CDHPs) and Employer Driven Health Plans.
