HDHP High Deductible Health Plan

Poll: Employers cite healthcare costs as No. 1 company challenge

This (the high cost of health insurance) is the big driver behind the momentum of high-deductible health plans and the underlying patient collection challenges that come with them.

Only 45 percent of small and mid-sized business executives say they are ready for the implementation of the employer mandate under the Patient Protection and Affordable Care Act, according to a recent survey conducted by the Lucas Group. The employer mandate will become effective in 2015 and requires businesses with more than 50 employees to provide healthcare coverage or be subject to fines.

The national third quarter Small and Mid-Sized Business Job Generation Outlook survey assessed responses from 400 executives representing a variety of industries, 73 percent of which were from small or mid-sized businesses. Responses indicated that the cost of providing healthcare coverage to employees is executives’ chief concern. Small businesses, defined as having fewer than 100 employees, and mid-sized businesses, with between 100 and 199 employees, ranked the cost of healthcare as a bigger challenge than talent availability, uncertainty in tax policy, domestic and international competition and environmental regulations, according to the survey.

According to the survey, small and mid-sized businesses are using a variety of strategies to combat the rising cost of employee healthcare. Highlights from the survey are shown below.

  • Twenty-nine percent of respondents said they will review plans periodically and may change their healthcare provider or plan.
  • Twenty-five percent will increase employee contributions.
  • Ten percent will engage an employee health education or wellness program.
  • Six percent will cut benefits.
  • Fourteen percent will do nothing and absorb the costs.
  • Twenty-two percent cited other strategies, such as expecting congressional exemption from the PPACA mandate, no longer hiring smokers and charging customers more.
  • Seventy-eight percent said they were somewhat or very pessimistic about bipartisanship in the federal government. This number marks a significant increase from the 67 percent who responded similarly in the second quarter.