september 17, 2010 shrm poll: organizations’ response to health care reform—organizations’...

September 17, 2010

SHRM Poll: Organizations’ Response to Health Care Reform—Organizations’ Short-Term Decisions

Organizations’ Response to Health Care Reform – Pending Short Term Decisions | ©SHRM 2010

Health Care Reform Series: Poll 2Introduction

Landmark legislation that brought about major reforms in health care coverage in the United States was enacted in March 2010. The law affects employers and HR professionals in a variety of ways. SHRM will be conducting a series of polls on health care reform and its implications for employers and employees. This presentation covers the findings from the second poll in this series, which was conducted in July 2010.

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Organizations’ Response to Health Care Reform – Pending Short Term Decisions | ©SHRM 2010 3

Key Findings

• What is the impact of the “grandfathered” status on organizations? 30% of HR professionals say they are attempting to maintain their organization’s grandfathered status, whereas 11% have decided not to maintain their organization’s grandfathered status.

• Are organizations planning to implement wellness programs in light of the health care reform law? Almost two-thirds (64%) of organizations already implemented wellness programs, and 18% are planning to implement them.

• What provisions in the new law are organizations planning to implement before they become required by law? About one-third of organizations reported that their plan already meets legal requirement in the following areas: 1) removing all preexisting condition exclusions for children under age 19, 2) removing annual maximums, and 3) re-evaluating current retiree medical plan.


Other

*We have already decided not to maintain our grandfathered status because we want to modify benefits to provide the additional benefits mandated under non-grandfathereded plans

*We have already decided not to maintain our grandfathered status as it will cost more to keep it than to change health care plans

We do not qualify for grandfathered status

^We will attempt to maintain grandfathered status to avoid having to comply with specific elements of the new law

Not sure what grandfathered status means

We have not yet begun to consider the issues around grandfathered status

^We will attempt to maintain grandfathered status to avoid additional costs to the organization and/or employees

We are or will be conducting analyses and exploring different health care options to decide whether to keep the grandfathered status

0% 10% 20% 30%

6%

5%

6%

6%

9%

10%

17%

21%

21%

Based on the new health care reform law’s “grandfathered” status, which one of the following statements best describes your organization’s position?

Note: n = 826. Percentages do not total 100% due to rounding.

• 30% of organizations are attempting to maintain their grandfathered status.^• 11% of organizations have decided not to maintain their grandfathered status.*


Based on the new health care reform law’s “grandfathered“ status, which one of the following statements best describes your organization’s position?

• We are or will be conducting analyses and exploring different health care options to decide whether to keep the grandfathered status (by union status): Organizations with no employees under a collective bargaining agreement (23%) were more likely than unionized organizations (14%) to report that they are or will be conducting analyses and exploring different health care options to decide whether to keep the grandfathered status.

• We have not yet begun to consider the issues around grandfathered status (by medical benefit funding): Self-insured organizations (24%) were more likely than insured organizations (11%) to report that they have not yet begun to consider the issues around grandfathered status.

• Not sure what grandfathered status means (by operations location): Organizations with multinational operations (13%) were more likely than U.S.-based (8%) organizations to report that they are not sure what grandfathered status means.

• We will attempt to maintain grandfathered status to avoid additional costs to the organization and/or employees (by medical benefit funding): Self-insured organizations (24%) were more likely than insured organizations (17%) to report they will attempt to maintain grandfathered status to avoid additional costs to the organization and/or employees.

• We will attempt to maintain grandfathered status to avoid having to comply with specific elements of the new law (by operations location): Organizations with multinational operations (13%) were more likely than U.S.-based organizations (8%) to report they will attempt to maintain grandfathered status to avoid having to comply with specific elements of the new law.

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Comparison by Organization’s Operations Location, Union Status and Medical Benefit Funding


Are there provisions in the new health care reform law that your organization is planning to implement before they become required by law?

CurrentlyOffering and Plan Already Meets LegalRequirement

Implementing Before Required by Law

Not ImplementingUntil Required by Law

Removing all preexisting condition exclusions for children under age 19 36% 11% 53%

Removing annual maximums 30% 9% 61%

Re-evaluating current retiree medical plan 27% 14% 58%

Removing lifetime maximums 24% 11% 66%

Extending coverage to adult children up to age 26 regardless of status (student/married) 22% 21% 57%

Extending coverage to adult children up to age 26 regardless of the availability of other coverage 20% 19% 61%

Reducing the maximum health care flexible spending account (FSA) employee contributions prior to 2013 8% 8% 83%

Note: n = 209-705. Percentages do not total 100% due to rounding. “Not sure/not applicable” responses were excluded from this analysis.



• Removing all preexisting condition exclusions for children under age 19 (by staff size): Larger organizations (those with 2,500 to 24,999 employees) were more likely than organizations with 500 to 2,499 employees to report that removing all preexisting condition exclusions for children under age 19 is one of the provisions in the new law that their organizations already offer.

• Extending coverage to adult children up to age 26 regardless of status (student/married) (by staff size): Smaller organizations (those with less than 500 employees) were more likely than organizations with 500 to 2,499 employees to report that extending coverage to adult children up to age 26 regardless of status is one of the provisions in the new law that their organizations already offer.

• Extending coverage to adult children up to age 26 regardless of the availability of other coverage (by staff size): Smaller organizations (those with less than 500 employees) were more likely than organizations with 500 to 2,499 employees to report that extending coverage to adult children up to age 26 regardless of the availability of other coverage is one of the provisions in the new law that their organizations already offer.

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Comparison of Provisions Organizations Are Currently Offering by Organization’s Staff Size

Smaller Organizations Larger Organizations Differences Based on Organization Staff Size

•500 to 2,499 employees (29%) •2,500 to 24,999 employees (50%)

Larger organizations > smaller organizations


•100 to 499 employees (30%) •500 to 2,499 employees (15%) Smaller organizations > larger organizations


•100 to 499 employees (29%) •500 to 2,499 employees (13%) Smaller organizations > larger organizations



Differences Based on Organization’s

Operations Location

Differences Based on Medical Benefit

Funding

Differences Based on Union Status

Removing annual maximumsInsured (37%) > self-

insured (26%)

Removing lifetime maximumsInsured (34%) > self-

insured (18%)Unionized (31%) > non-

unionized (22%)

Extending coverage to adult children up to age 26 regardless of status (student/married)

U.S.-based only organizations (24%)

> Multinational operations (15%)

Insured (39%) > self-insured (10%)

Extending coverage to adult children up to age 26 regardless of the availability of other coverage

Insured (35%) > self-insured (8%)

Comparison of Provisions Organizations Are Currently Offering by Selected Organizational Demographics

Note: Blank cell indicates that there were no significant differences in this category.


Are you planning to implement wellness programs in light of the new health care reform law?

Implemented; 64%

Planning to im-plement; 18%

Not planning to implement yet;

18%

Note: n = 598. “Not sure/not applicable” responses were excluded from this analysis.

• Comparison by Organization’s Medical Benefit Funding: Self-insured organizations (69%) were more likely than insured organizations (57%) to report implementing wellness programs in light of the new health care law.


How is your organization’s primary medical benefit currently funded?

Self-insured; 56%

Insured; 44%

Note: n = 749


How is your organization’s primary medical benefit currently funded?

• By staff size: Larger organizations (those with 500 or more employees) were more likely than organizations with fewer than 500 employees to report that their organization’s primary medical benefit is self-insured.

• By operations location: Organizations with multinational operations (71%) were more likely than U.S.-based only (51%) organizations to report that their organization’s primary medical benefit is self-insured.

• By sector: Publicly owned for-profits (72%) were more likely than privately owned for-profits (50%) and nonprofits (49%) to report that their organization’s primary medical benefit is self-insured.

• By union status: Unionized organizations (64%) were more likely than non-unionized (54%) organizations to report that their organization’s primary medical benefit is self-insured.

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Comparison by Organization’s Staff Size, Operations Location, Sector and Union Status


•100 to 499 employees (39%) •500 to 2,499 employees (69%)•2,500 to 24,999 employees (84%)•25,000 or more employees (84%)

Larger organizations > smaller organizations


Demographics: Organization Industry

IndustryManufacturing –other 18%

Health care, social assistance (e.g., hospitals, clinics) 13%

Financial services (e.g., banking) 8%

Services –professional, scientific, technical, legal 7%

Educational services/education 6%

Government/public administration—federal, state/local, tribal 5%

Retail/wholesale trade5%

Construction, mining, oil and gas 4%

Insurance4%

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Demographics: Organization Industry (continued)

IndustryOther services (e.g., other nonprofit, church/religious organizations) 4%

Transportation, warehousing (e.g., distribution) 3%

High-tech 3%

Services—accommodation, food and drinking places 3%

Utilities 2%

Real estate, rental, leasing 2%

Publishing, broadcasting, other media 2%

Manufacturing—auto/auto-related 2%

Arts, entertainment, recreation 1%

Consulting 1%

Telecommunications 1%

Association—professional/trade 0%

Pharmaceutical 0%

Biotech 0%

Other 5%

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Demographics: Organization Sector

Other

Government sector

Nonprofit organization

Publicly owned for-profit organization

Privately owned for-profit organization

0% 10% 20% 30% 40% 50% 60%

4%

8%

20%

21%

47%

14Note: n = 756


Demographics: Organization Staff Size

50 to

99

emplo

yees

100

to 4

99 e

mplo

yees

500

to 2

499

emplo

yees

2500

to 2

4999

em

ploye

es

2500

0 or

mor

e em

ploye

es0%

10%

20%

30%

40%

50%

6%

27%

35%

26%

5%

15



Demographics: Other

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Note: n = 763

U.S.-based operations 75%

Multinational operations 25%

Single-unit company: A company in which the location and the company are one and the same

29%

Multi-unit company: A company that has more than one location

71%

Multi-unit headquarters determines HR policies and practices

64%

Each work location determines HR policies and practices

1%

A combination of both the work location and the multi-unit headquarters determine HR policies and practices

35%

Is organization a single-unit company or a multi-unit company?

Are HR policies and practices determined by the multi-unit corporate headquarters, by each work location or both?

Does the organization have U.S.-based operations (business units) only or does it operate multinationally?

Note: n = 750

Note: n = 556

• 19% of organizations indicated that employees at their work location were unionized.

Note: n = 755


SHRM Poll: Organizations’ Response to Health Care Reform – Poll 2

• Response rate = 21%• Sample comprised of 1,095 randomly selected HR

professionals with the job title of manager and above, as well as HR professionals in the compensation and benefits functional area. All analyses were based on respondents working at organizations with a staff size of 50 employees or more.

• Margin of error is +/- 3%• Survey fielded July 22–August 3, 2010

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Methodology

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september 17, 2010 shrm poll: organizations’ response to health care reform—organizations’...

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grandfathered status

organizations position

selfinsured organizations

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health care reform series

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