Evaluating benefit plans in the wake of the new healthcare law

The new law will have major cost and compliance implications for employers, but companies will have to consider the broader marketplace as well. Health benefits packages can be integral to a company’s ability to attract and retain top talent, and employers will want to consider health plan decisions in that context. In 2009, employers offering health insurance spent an average $6,700 per employee—nearly double the amount spent in 2001. A recent PwC survey found that 60% of U.S. employers are planning to push more of the costs to their employees, while expecting more employee responsibility for managing personal health. Cost-shifting has many companies moving from an employee co-pay model to a co-insurance model, where the employee has a front-end deductible and then splits the remaining costs with the insurer. In addition, high-deductible health plans are increasingly being added as an option.

To prepare for the new health insurance market, employers will want to consider these questions:

• What will it cost to comply with the law and communicate and administer the changes over the next five to eight years? Can we use financial models to predict the costs?
• Since the exchanges will provide guaranteed coverage for individuals, do we need to continue to subsidize coverage for spouses and dependents?
• Do we have the ability to administer new regulations affecting insurance coverage?
• Is wellness and prevention part of our culture?
• What strategies can we put in place to improve employee health and lower costs?
• How can we encourage employees to engage in our wellness campaign? What incentives should we offer?