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1 in 2 Employers Link PPACA to Cost Increases

Margaret Dick Tocknell, for HealthLeaders Media, August 14, 2013

Fifty-five percent of employers surveyed about the impact of the Patient Protection and Affordable Care Act report increased business costs in the range of 1% to 4%.

Many employers have waxed eloquent about the effect of the Patient Protection and Affordable Care Act on their business costs. Their statements often include dire warnings about layoffs and large premium increases. But when employers actually put pen to paper (or fingers to keyboard) they are discovering that the impact may actually be less dramatic.

Survey results show that 69% of employers who offer health insurance benefits have analyzed the impact of healthcare reform on those benefits. About half of the respondents assigned a dollar value to the impact and of those, 55% reported increases from 1% to 4%, according to the 2013 results from ACA'S Cost Impact: Employer-Sponsored Health Plans.

In a telephone interview, Julie Stich, research director for the Milwaukee-based International Foundation of Employee Benefit Plans, said the large share of employers doing ACA cost analysis indicates that employers are "moving forward" in terms of ACA implementation. "They are looking at their direct costs, assessing the impact on their bottom line, and looking for ways to cuts costs."

Among the survey surprises: about 51% of small employers (fewer than 50 employees) reported healthcare benefit increases between only 1% and 6% in 2013, while 28% said the increase was more than 15%. Another 17% said there was no change in costs.

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