Employers: Health insurance coverage to remain, but costs may rise

Business Insurance reports that, in the wake of health reform, 88 percent of employers "responding to a Towers Watson & Co. survey said they definitely or likely will continue providing coverage to employees. Just 3% said they are likely to drop coverage and instead pay the annual $2,000-per-full-time-employee penalty that starts in 2014. The remaining 9% said they haven't yet decided what to do as a result of the change in federal law." Forty-three percent said they would reduce or revoke retiree coverage. "One key reason that employers may eliminate or reduce retiree coverage is that there won't be the same need by retired workers, especially those not yet eligible for Medicare, because of the new law. .... 89 percent of employers surveyed say the law will reduce the number of uninsured, and 56 percent say it will improve access to care" (Geisel, 5/25). 

The Associated Press adds that the "benefits consultant surveyed 661 companies this month and found that 94 percent of those that responded believe the reform law passed by Congress earlier this year will raise costs. Eighty-eight percent plan to pass the increases on to employees, and 74 percent anticipate reducing health benefits and programs." A Towers Watson executive said employees should approach the finding with this perspective: "You've got coverage now, you're likely to continue to have it through your employer, and it's something you want to monitor over time" (Murphy, 5/25).

Meanwhile, Bloomberg Businessweek reports on possible benefits changes at Alcoa: "Alcoa,  the country's largest aluminum maker, and the union are in talks to replace a labor accord covering almost 6,000 workers at 11 plants across the U.S., which expires May 31. ... The company revised lower its health-care proposal to bring the cost of comprehensive family coverage [under its non-union plan] to about $272 a month, [Company spokesman Kevin] Lowery said. Comprehensive family coverage will rise to about $315 a month under Alcoa's plan, from $87 now" for union workers (Lococo, 5/26).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.