HR Executives Tie Higher Health, Labor Costs to ACA

By Bruce Shutan

The HIX marketplace may offer Americans more choice when it comes to health insurance, particularly as public exchange options expand, but it continues to complicate life for HR professionals. A recent survey of chief human resource officers casts the Affordable Care Act as a whipping post for anything from higher employee health care and labor costs, as well as lower quality of care, to a number of related problems.

Of 560 CHROs who were sent a survey by the University of South Carolina’s Darla Moore School of Business, 213 answered two sets of questions about their perceptions of the ACA and resulting need for action. Actions tied to the ACA included higher employee contributions toward health insurance (52%) and a crackdown on coverage eligibility (11%), as well as covered lives being steered to private (1%) or public exchanges (0.5%).

Industry practitioners also tied the ACA to lower health care quality (33.8%), health care inefficiency (37%), poor health care delivery (31.6%), less innovation in health care and health systems (32% and 30%, respectively), and a decrease in transparency of health care delivery (20%).

In addition, researchers observe that the ACA has accelerated the trend toward consumer directed health plans, with 73% of respondents reporting that they either offer or plan to offer this option. Just 10% of employers who were previously surveyed offered CDHPs in 2007.

The survey confirmed widespread concern about the ACA’s impact on part-time employees based on the law’s definition of full-time work being at least 30 hours a week. Nearly 30% of the respondents had this threshold in mind in anticipation of employer mandate penalties. “We frequently had people that worked 32-34 hours, and if enough of them did so, it would put us at risk for fines,” reported one CHRO who was surveyed. “Therefore, we now limit workers to 27 hours to ensure that we minimize the number that might exceed 30 hours.”

While the researchers say the ACA has increased access to health care, they note that it’s too early to assess the impact on quality but add that “cost increases are being borne by the individuals that already had health insurance through their employers.”

Bruce Shutan is a Los Angeles-based freelance writer. Reprinted from Employee Benefit News

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