Employers are nearly united in their concerns about rising health costs but are divided in how to respond to the challenge.

A survey of 1,500 benefit decision makers, commissioned by the Transamerica Center for Health Studies and conducted by Harris Poll, finds that 80% are concerned about the affordability of health insurance, while 78% are troubled by the rise in health care expenses.

While most employers recognize the need to cut costs, the great majority are also keenly aware of the risks they run in trimming benefits. Eighty-four percent say health benefits are an important part of recruiting and retaining qualified workers, while 84% say quality benefits are a key contributor to employee satisfaction.

Only 19% of employers say they will likely change their plan offerings in the next two years, while 31% say they do not anticipate making any significant changes to the benefits they offer. In the middle, 31% say they plan to retain their existing plans but make changes to them.

Wellness programs are now solidly mainstream. Fifty-five percent of employers report offering some type of wellness program, even though a separate survey of employees finds that only 46% of workers believe their employer offers one.

Many employers continue to express concerns about the Cadillac Tax, an excise tax on expensive health plans that was included in the Affordable Care Act and was slated to go into effect in 2018. In response to strong opposition from business groups and labor unions, Congress voted last year to delay its implementation by two years and many observers assumed that the policy was ultimately dead.

And yet, 70% of employers say they are planning on making changes to their benefits in order to avoid getting hit with the 40% excise tax. That may be because Speaker Paul Ryan has proposed a similar measure in his own health care proposal and economists across the political spectrum have generally agreed that exempting benefits from taxation drives health care costs up by encouraging employers to compensate workers through benefits, rather than wages.

BenefitsPro

Instant Insights /

Companies Divided on Response to Rising Health Costs

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