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Final Summary Report ACA Employer Survey

Leslie A. Muller, Paul Isely, & Adelin Levin 1/1 /!"1#

S$MMAR% &F RES$L'S F&R (&MA &)ERALL 1. *+, o- -irms in .est Mi/0i1an 2it0 1reater t0an " employees 0ave 0ealt0 insuran/e -or t0eir 2or3ers. !. +", o- -irms in .est Mi/0i1an are un/ertain a4out o--erin1 0ealt0 insuran/e in !"1 . C5A67ES '& 5EAL'5 PLA6S 1. #*, o- -irms 0ave already in/reased t0e s0are o- /osts 2it0 employees !. +8, 0ave s0i-ted /osts usin1 a 5i10 9edu/ti4le Plan. +. +", 0ave s0i-ted /osts usin1 /0an1es to Pres/ription 9ru1 /overa1e #. 1, o- -irms are 1ettin1 t0eir primary in-ormation on ACA -rom somet0in1 ot0er t0an t0eir insuran/e /arrier or insuran/e 4ro3er. . +1, o- -irms already 0ave implemented a 2ellness plan in response to t0e ACA :. ##, o- -irms are /onsiderin1 a 2ellness plan C5A67ES '& 5IRI67 1. 1 , o- -irms 0ave in/reased t0e use o- temporary 2or3ers. '0is is more prominent in smaller -irms !. !!, plan on redu/in1 or limitin1 0irin1 +. !*, 0ave limited employee 0ours #. '0e aut0ors estimate t0e e--e/t is /onservatively 1,""" -e2er 2or3ers in (&MA as a result o- -irms; rea/tions to t0e ACA over t0e last year. . '0e aut0ors estimate t0at 1ro2t0 2ill 4e ".1 to ".! per/enta1e points lo2er in (&MA over t0e ne<t 1! mont0s as a result o- t0e ACA.

Motivation= '0e A--orda4le Care A/t >ACA? 2ill a--e/t 0o2 -irms intera/t 2it0 t0eir employees and t0e 0ealt0/are plans t0at t0ey provide over t0e ne<t -e2 years. 7enerally, t0ese /0an1es in/rease /osts /ompared to t0e 0ealt0/are /0oi/es -irms 2ere ma3in1 in t0e past. '0ese /0an1es in/lude= 6e2 ta<es t0at must 4e paid, in/reasin1 /osts o- t0e plans Re@uired /0an1es to /overed servi/es &ut o- po/3et ma<imums &t0er /overa1e /0an1es As a result -irms are ma3in1 /0oi/es on 0o2 t0ey 2ill provide 0ealt0/are -or t0eir employees 1oin1 -or2ard. Firms are /0oosin1 many di--erent pat0s and t0is study 2as desi1ned to s0o2 0o2 -irms in (ent, &tta2a, Mus3e1on, and Alle1an /ounties >(&MA? in .est Mi/0i1an are plannin1 on respondin1. Survey '0e main point o- t0e survey 2as to -ind out 20at -irms 2ere doin1 2it0 t0eir 0ealt0 plans and 4usiness pra/ti/es as a result o- t0e ACA Employer Mandate. '0e survey instru/ted respondents to only indi/ate 20at /0an1es t0ey 0ad made/2ere /onsiderin1 ma3in1 4e/ause o- t0e ACA. '0e in/lusion o- t0ese instru/tions is important 4e/ause employers 0ave 4een ma3in1 /ost /ontainment de/isions -or years as 0ealt0 /are /osts in/reased, and it 2as important to distin1uis0 t0ese /0an1es -rom t0ose made 4e/ause o- t0e mandate. A summary o- results and t0e /orrespondin1 @uestions /an 4e -ound in t0e endnotes and Appendi< 1 o- t0is report. '0e /onstru/tion 2as a Aoint e--ort 4et2een 7)S$ and Priority 5ealt0. '0e survey 2as sent out to *1B 4usinesses in (&MA in early &/to4er !"1+. In all 2e re/eived 18# responses, -or a response rate o- 1*,. Sample '0e initial sample 2as /0osen randomly -rom a data4ase o- (&MA employers 20o 0ad " or more employees in !"11. '0e Mi/0i1an Small Cusiness and 'e/0nolo1y 9evelopment Center at 7)S$ supplied t0e names and addresses o- t0e CE&s -or ea/0 /ompany. Alt0ou10 all o- t0ese -irms reported more t0an " employees, +! per/ent o- t0e sample reports less t0an " -ull time employees. '0e di--eren/es arise 4e/ause a -irm /ould 0ave more t0an " total employees, 4ut less t0an " o- t0ese are -ull time. In addition, -irms t0at 0ad around " 2or3ers in !"11 /ould 0ave de/reased t0eir 2or3-or/e. Re1ardless o- t0e reasons, t0e 1roup o- -irms 2it0 less t0an " 2or3ers is not a representative sample, and t0is -a/t s0ould 4e /onsidered as t0e results are analyDed. .e /0ose t0ree -irm /0ara/teristi/s to in/lude in t0e survey @uestions= -irm siDe, avera1e employee s3ill level, and industry. 5ealt0 insuran/e and 4usiness pra/ti/es are 2idely 3no2n to vary 2it0 -irm siDe, 1iven t0e e/onomies os/ale and 4ar1ainin1 po2er in0erent in lar1e -irms. S3ill level also matters, as -irms tend to /ompete -or 0i10erE s3illed 2or3ers 2it0 0ealt0 4ene-its. 5i10Es3illed 2or3ers also 0ave lar1er repla/ement /osts in terms o- trainin1 and t0is may a--e/t 20et0er a -irm /0an1es 4usiness pra/ti/es as a result o- t0e mandate. Finally, t0e type oindustry a -irm is in may a--e/t t0eir 0ealt0 insuran/e /0oi/es and 4usiness pra/ti/es. (&MA, and parti/ularly t0e lar1er -irms sampled, 0as a lar1e per/enta1e o- manu-a/turin1 -irms, 20i/0 tend to o--er 4etter 0ealt0 insuran/e t0an, e.1., t0e servi/e industry. 6ot surprisin1ly, t0e maAority o- -irms are small -irms, 2it0 * per/ent 0avin1 less t0an 1"" employees. '0e sample -irms 2it0 a4ove ! " employees is @uite small, 2it0 only : per/ent in t0e ! "E#** ran1e and * per/ent 0avin1 more t0an "" -ull time 2or3ers. .e -ind t0at 20ile t0e "" or more sample tends to -ollo2 t0e national trends in 0ealt0 insuran/e and 2ellness plan /0ara/teristi/s, t0e ! "E#** siDe does not. .e used re1ression analysis and /ross ta4ulations to e<amine 20et0er t0e results are 4ein1 driven 4y s3ill level or industry and -ound no /orrelations. 5en/e 2e /on/lude t0at t0is sample is li3ely not representative o- t0is -irm siDe. &n a s/ale -rom 1 to 1", 2it0 1" 4ein1 0i10ly s3illed, t0e maAority o- (&MA rate t0eir 2or3ers as a 8 or 0i10er. '0is tells us t0at t0ese -irms may 4e more li3ely to attra/t produ/tive 2or3ers 2it0 0ealt0 4ene-its, and 4e less li3ely to redu/e t0eir la4or -or/e. '2enty seven per/ent o- t0e -irms are in Manu-a/turin1, -ollo2ed 4y &t0er >* per/ent?, 5ealt0 Care >8 per/ent?, and Retail and Food Servi/e >ea/0 :. per/ent?. Alt0ou10 Manu-a/turin1 is overEsampled and Retail is underE sampled as /ompared to t0e population in (&MA, ea/0 sample 4y industry is too small to ma3e meanin1-ul in-eren/es as to a parti/ular industryFs a--e/t on /ost /ontainment and 4usiness pra/ti/e /0an1es.

Survey Results

5ealt0 Insuran/e &--erin1s 6inetyEt0ree per/ent o- -irms 2it0 more t0an " employees in (&MA /urrently o--er 0ealt0 insuran/e. 15o2ever, -irms /learly 0ave a lot o- un/ertainty a4out 20at t0ey 2ill do 1oin1 -or2ard. .0ile most -irms >B* per/ent? plan on o--erin1 insuran/e and only B per/ent 0ave not de/ided -or t0e !"1# plan year, 4y !"1 , only :: per/ent 2ill o--er insuran/e and t0e per/enta1e o- unde/ided Aumps to +" per/ent. '0is level o- un/ertainty in 0ealt0 /overa1e a--e/ts 2illin1ness o- -irms to 0ire or invest. 5ealt0 Care Cost Containment Measures Firms 0ave 4een ena/tin1 /ostE/ontainment measures -or years as 0ealt0 /are /osts 0ave risen. Are t0ey a/tin1 -urt0er on t0ese measures 4e/ause o- t0e ACAG For t0e most part, yes. '0e areas o- /ontainment 20ere 2e e<pe/t to see t0e most /0an1e is in t0e employee s0are o- /osts, t0e use o- 0i10 dedu/ti4le plans, and /0an1in1 pres/ription /overa1e.
&verall, t0e survey results s0o2 t0at -irms are /ontainin1 /osts 4y passin1 t0em alon1 to t0eir employees. '0is trend 0as 4een evident 4e-ore t0e ACA 2as passed, 4ut 0as sin/e a//elerated in anti/ipation o- 0i10er /osts. '0e results s0o2 t0at #* per/ent o- employers 0ave already in/reased t0e s0are o- /osts -or t0e employee 4e/ause ot0e ACA, 20ile #" per/ent are /onsiderin1 t0is option. (&MA employers are rea/tin1 similarly to -irms nationally, 2it0 #+ per/ent 0avin1 or plannin1 to in/rease t0e employee s0are o- premiums, and ++ per/ent plannin1 to in/rease dedu/ti4les >IFECP !"1+?. 5i10Ededu/ti4le plans 0ave 4e/ome /ommonpla/e in t0e last -e2 years. '0e ACA 0as only a//elerated -irm use ot0ese plans. '0irtyEseven per/ent o- -irms 0ave implemented or e<panded t0eir 0i10 dedu/ti4le plans, 20ile #1 per/ent are /onsiderin1 t0is option. '0e pri/e o- p0arma/euti/als 0as in/reased su4stantially. '0irty per/ent o- -irms 0ave already /0an1ed t0eir dru1 /overa1e, 20ile # per/ent are /onsiderin1 a /0an1e. !

.ellness Plans (&MA -irms are not Aust in/reasin1 /osts -or employees, 4ut ta3in1 responsi4ility -or assistin1 employees in 1ettin1 0ealt0ier. '0e ACA 0as in/reased t0e per/enta1e dis/ount in premiums a 2or3er may re/eive i- 0e a/0ieves employerEset 0ealt0 standards, and -irms are ta3in1 advanta1e o- t0is. .or3ers may re/eive any20ere -rom +" to " per/ent o-- t0eir premium, 20i/0 is @uite an in/entive to parti/ipate in 2ellness plans. '0e survey s0o2s t0at +1 per/ent o- -irms 0ave already implemented a 2ellness plan 4e/ause o- t0e ACA, and ## per/ent are /onsiderin1 it.+ Firms in (&MA are adoptin1/e<pandin1 2ellness plans at a 0i10er rate t0an t0e rest o- t0e /ountry. A !"1+ study 4y t0e International Foundation o- Employee Cene-it Plans >IFECP? -ound t0at #: per/ent o- -irms 2it0 over " 2or3ers 0ave or are plannin1 on addin1 2ellness plans.
Firms are also in/reasin1 t0e use o- 2ellness in/entives. Seventy one per/ent o- -irms 0ave implemented 2ellness in/entives or are /onsiderin1 it. '0is per/enta1e is a1ain 0i10er t0an t0e national avera1e, 2it0 only #1 per/ent o-irms 2it0 over " employees /0oosin1 to do so >IFECP?.

C0an1es in Cusiness Pra/ti/es Many -irms 0ave de/ided 0o2ever to minimiDe t0eir e<posure to ACA /osts 4y limitin1 t0e employees t0at must 4e /overed. Huestions 1#a E 1#/ s0o2 t0at +: per/ent o- -irms are /onsiderin1 >or usin1? temporary 2or3ers, ## per/ent are /onsiderin1 or 0ave redu/ed/limited 0irin1 over t0e ne<t 1! mont0s, and 1 per/ent are /onsiderin1 or 0ave already redu/ed/limited 0ours so t0at t0e employee is /onsidered partEtime.
$sin1 t0e -a/ts t0at !!, o- -irms 0ave redu/ed 0irin1 plans, -irms e<pe/ted 0irin1 plans, and t0e siDe o- t0e 2or3-or/e in (&MA, t0ere are an estimated 1,""" -e2er Ao4s >: " I 1,!""? /urrently in .est Mi/0i1an as a result o- t0e ACA. '0is does not in/lude underemployed 4e/ause o- 0ours 4ein1 limited, nor does it in/lude t0e Ao4s t0at do not e<ist 4e/ause o- limited e<pansions. It is un/lear 0o2 t0is 2ill evolve as t0e ACA is implemented over t0e ne<t -e2 years. 9o t0e -irms /onsiderin1 ma3in1 t0ese /0an1es s0are any /ommon /0ara/teristi/sG .e ran re1ressions to see i-irm siDe, s3ill level, or industry may in-luen/e t0eir de/isions. &verall, industry 0ad no statisti/al e--e/t on any ot0e responses in Huestion 1#. 5o2ever, small -irms 2ere more li3ely to limit 0irin1 and redu/e 0ours. In addition, t0e 0i10er t0e s3ill level, t0e lo2er t0e pro4a4ility o- usin1 temporary 2or3ers, limitin1 0irin1, or redu/in1 0ours.

'0is ma3es sense, as 0i10Es3illed 2or3ers are less easily repla/ed t0an are lo2Es3illed 2or3ers. In addition, t0ose -irms 20o reported 4ein1 Funde/idedF a4out o--erin1 insuran/e /overa1e in !"1 >Huestion :? 2ere also more li3ely to limit 0irin1 and redu/e 0ours. '0ese a/tions s0o2 unam4i1uously t0at -irms are ta3in1 a more /onservative loo3 at -uture 0irin1 needs and t0ere4y possi4ly 1ro2in1 more slo2ly t0an t0ey 2ould 0ave 2it0out t0e ACA re@uirements. Crea3do2ns o- various 4usiness plan de/isions 4y -irm siDe /an 4e seen in t0e Appendi<.

Sour/es o- in-ormation on t0e ACA Per0aps some o- t0is -irm un/ertainty stems -rom 20ere t0e -irm re/eives its in-ormation a4out t0e ACA >Huestion * in Appendi<?. Fi-tyEone per/ent o- -irms are 1ettin1 t0eir primary in-ormation -rom a sour/e ot0er t0an t0eir insuran/e 4ro3er or insuran/e /arrier. 'rade or1aniDations are supplyin1 in-ormation to 1 per/ent o- -irms, 2it0 t0e ne2s media 4ein1 t0e primary sour/e -or 11 per/ent o- -irms.

Appendi<
What are your future plans with respect to employer-sponsored health insurance coverage? Will have Will not have Not sure/undecided coverage coverage In the 2014 plan year In the 201 plan year

What has !een your primary resource for understanding the impact of health reform and the "#" to your !usiness? #onsulting firms

$overnment Insurance !ro%er Insurance carrier News media &eers &rofessional/'rade "ssociations (ther ))))))))))))))))))))))))

5as your or1aniDation implemented or seriously /onsidered any o- t0e -ollo2in1 /0an1es to your sta--in1 or 2or3-or/e needs as a result o- t0e ACAG 6o, 4ut 6o, and not %es /onsiderin1 /onsiderin1 In/rease t0e use o- temporary or /ontin1ent 2or3ers Redu/e or limit t0e amount o- 0irin1 in t0e ne<t 1! mont0s Redu/e or limit t0e amount o- 0ours 2or3ed o- /ertain partEtime employees Redu/e t0e siDe o- your overall 2or3-or/e Can/el plans to e<pand a /urrent lo/ation or open up a ne2 lo/ation

Re-eren/es

International Foundation o- Employee Cene-it Plans. !"1+ EmployerESponsored 5ealt0 Care A/t= ACAFs Impa/t. Retrieved 6ovem4er !8, !"1+ -rom 0ttp=//222.i-e4p.or1/pd-/resear/0/!1"+ACAImpa/tSurvey.pd-

1 '0e survey @uestion reads, J9oes your or1aniDation /urrently o--er employerEsponsored 0ealt0 insuran/e /overa1e to its employeesGJ. Firms ans2ered FyesF or FnoF. ! '0e survey @uestion reads, J.0i/0, i- any, o- t0e -ollo2in1 /ost /ontainment measures 0as your or1aniDation ta3en or seriously /onsidered in an e--ort to /ontrol 0ealt0 /are /osts as a result o- t0e ACAG >C0e/3 all t0at apply?J. '0e @uestion 2as as3ed -or= In/rease employee;s s0are o- medi/al servi/es >e.1., in/reased /oEpays, /oinsuran/e, dedu/ti4les, s0are o- premium /ost, outEo-Epo/3et limits?, Implement or e<pand use o- 0i10 dedu/ti4le 0ealt0 plans >e.1., 5ealt0 Savin1s A//ounts?, Implement /0an1es to pres/ription dru1 /overa1e >e.1., use o- -ormularies?. '0e possi4le responses in/luded= already ta3en, not ta3en 4ut /onsiderin1, not ta3en nor /onsiderin1, not appli/a4le. + '0e survey @uestion reads, J.0i/0, i- any, o- t0e -ollo2in1 /ost /ontainment measures 0as your or1aniDation ta3en or seriously /onsidered in an e--ort to /ontrol 0ealt0 /are /osts as a result o- t0e ACAG >C0e/3 all t0at apply?J. '0e @uestion 2as as3ed -or= Implement or e<pand 2ellness plans, Implement or e<pand 2ellness in/entives >e.1., premium dis/ounts?. '0e possi4le responses in/luded= already ta3en, not ta3en 4ut /onsiderin1, not ta3en nor /onsiderin1, not appli/a4le.