More than half of private companies are finding themselves ahead of the government’s employer insurance requirements now that the Treasury Department has delayed compliance until 2015.
A survey from PwC, conducted before the Obama administration announced the delay, found that 56 percent of private companies already comply with the requirement to offer healthcare coverage to their employees.
These companies don’t plan to change their healthcare coverage or contribution levels ahead of 2015 when the provision kicks in, said a PwC news release on Friday announcing the results of its latest quarterly Trendsetter Barometer survey.
[See also: Employer mandate delayed]
The survey tracks the issues of privately-held growth businesses, and included the views of CEOs and CFOs from 210 businesses.
Overall, 72 percent of the surveyed companies consider themselves prepared for the ACA's next wave of requirements. However, only 35 percent of businesses said they are well prepared. One-in-five, or 19 percent, cited specific actions they plan to take to comply with the ACA, but another 21 percent said they are uncertain about which steps they'll take to meet the requirements.
An additional year before the mandatory employer reporting requirements start should ease some concerns about how best to comply with the ACA, said Ken Esch, a partner with PwC’s Private Company Services practice. He suggested in the release that business owners “… take advantage of the additional time by treating 2014 as a pilot year during which their companies can fully adapt health coverage and reporting systems.”
Very few businesses plan to take negative steps in response to the ACA, according to survey results. Only 3 percent of companies anticipate dropping coverage and 1 percent said they may scale back to fewer than 50 employees to be exempt from the requirement.
[See also: Employers brace for cost increases]
Also according to the survey, 70 percent of the companies don’t believe the ACA will constrain their healthcare costs over the next few years. But 58 percent also believe that increased healthcare costs haven’t slowed their profit growth over the past year. Of the 36 percent that do believe healthcare costs have slowed their profit growth, the vast majority characterized the impact as moderate. Looking ahead, the companies project similar 12-month revenue growth rates from 6.1 percent to 6.2 percent.
Seventy percent of companies reported that were taking their own steps to control healthcare expenses over the next two years. Primarily, they are requiring that employees pay more of the policy premium, 31 percent, or more at the point of care or service, 29 percent, and 40 percent are increasing employer investment in wellness programs.
“Companies that plan to shift more healthcare costs to employees should be careful to calculate whether such cost-shifting could cause the company to fail the ACA’s affordability test,” Esch cautioned in the release. “Companies that offer wellness incentives also should remember to take those incentives into account when calculating the minimum value of their healthcare coverage plans.”
Nearly three-fourths, or 74 percent, of companies that have 50 or more employees said that their healthcare coverage meets the ACA definition of affordability. That means no more than 9.5 percent of an employee’s income goes toward healthcare coverage. Twenty percent cited an affordability problem. Nearly half of those companies said that they plan to adjust their healthcare policies compared with only 12 percent of companies that do not have an affordability issue.
[See also: Report shows continued decline in employer-sponsored health benefits]