Survey finds most big companies plan to keep offering health benefits despite reform costs

Survey: Big companies expect reform to raise costs

INDIANAPOLIS — Big companies think health care reform will hike their costs, but most expect to continue offering subsidized benefits to workers, according to a new Towers Watson study.

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.

That could mean insurance co-payment or deductible hikes or more high-deductible plans, said Mark Maselli, who heads Towers Watson’s North American Health and Group Benefits unit.

He added that companies will likely continue to offer “medical coverage that individuals are used to having” at least for the foreseeable future. Nearly three quarters of the companies responding to the survey said they expect to continue providing subsidized coverage for active employees.

Maselli said benefits could change as the reform law unfolds over the next few years. But he saw no need for employees to panic.

“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,” he said.

Some companies could see small reform-related cost hikes next year, after the start of provisions that ban lifetime maximums for benefits and extend coverage of young adult dependents on parental plans to age 26. Maselli and other benefits experts say the size of this hike will depend greatly on the company and the employees it covers.

Towers Watson’s national survey spanned several industries and involved companies with a median size of 5,600 employees.

It also found that big companies generally plan to continue offering health promotion and wellness programs. But 43 percent of employers that offer retiree benefits expect to reduce or eliminate them.

Containing health care costs was an essential or high priority for 96 percent of survey respondents, who were asked how important specific reform goals were to their organization.