Despite already modifying their benefit plans last year, employers expect their healthcare costs to rise again in 2016, according to the Employee Benefits Trend Study recently released by Wells Fargo Insurance.
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Fifty-eight percent of employers surveyed expect their medical plan costs to exceed the thresholds for the Affordable Care Act (ACA) excise tax—popularly known as the “Cadillac Tax”—which was originally set to take effect in 2018 but has since been delayed to 2020.
Additionally, 70% of employers expect their budgets for benefit plans to increase, as human capital, health, and productivity remain key issues for businesses to manage.
The Employee Benefits Trend Study surveyed more than 650 middle-market companies and large corporations to better understand how organizations are responding to healthcare reform requirements, while also developing a competitive benefits strategy.
“As they balance business goals with controlling cost, employers are also exploring additional changes to their plans to avoid the Cadillac Tax,” says Dan Gowen, national practice leader with Wells Fargo Insurance’s Employee Benefits National Practice. “The rapidly changing market and delay in the tax implementation provides another opportunity for employers to be creative as they continue to refine their benefit plans.”
Half of the employers in the study said they will continue to make changes to their plans either this year, or in 2017, by adding a high deductible plan option (52%), increasing the employee contribution percentage (56%), or increasing coinsurance features (55%).