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Affordable Care Act Influencing Employers

November 3, 2015

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Employers are challenged with administrative and compliance requirements; offering wider benefits choices; and controlling costs.

The Guardian Life Insurance Company of America® (Guardian), one of the nation’s largest mutual life insurers and a leading provider of employee benefits, has announced new findings from the third annual Guardian Workplace Benefits StudySM that highlight how the Affordable Care Act (ACA) is causing employers to consider new  approaches to benefits funding and delivery.

Employers need guidance on how to manage the challenges they expect under the ACA, including new administrative and compliance requirements, in addition to the demands of offering employees benefits choices and enhancing the enrollment experience while controlling costs and funding. Sixty-one percent of employers cite “preparing for a post-healthcare reformera” as a highly important benefits objective, but only four in ten feel prepared to meet this objective.    

 Facing a myriad of reforms and regulations, 60% of employers say they need help managing the ACA terrain. As companies reassess their approach to benefits, three trends are gaining momentum: increased outsourcing; reliance on private exchanges; and consideration of self-insurance.    

  • One in three employers expect to outsource more aspects of their benefits program as a direct result of the ACA. Nearly 70% of employers expect greater compliance and administrative burdens.      
  • About 20% of employers expect to offer benefits on a private exchange in the next year. Top reasons are to increase employee choice and to improve the employee experience. Seven in ten employers say it is highly important to offer benefits that meet their employees’ personal needs and help them make better benefits choices.      
  • Of those thinking of self-insuring, 58% say the ACA is the impetus and half of those planning to self-insure expect to carry stop loss insurance. Self-insuring medical plans is a less common funding option for smaller firms but is receiving increased attention due to  the ACA. Seventy-eight percent of employers expect benefit cost increases due to the ACA, impacting an employer’s health benefits offering.        

 
“Brokers and carriers are needed to play a strategic role in helping employers navigate the ACA and in identifying the best options for how  they can move forward in a changed benefits landscape,” said Ray Marra, Senior Vice President, Group Products at Guardian. “As employers adapt to the ACA, we’re seeing greater adoption of private exchanges and self-funded medical plans paired with stop loss insurance, so employers can deliver the workplace benefits their employees rely on while addressing the challenges they are facing.”

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