Q&A: How Will Health Reform Affect My Company Plan?

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Q: I’m switching jobs in two weeks, and am unsure what my new firm will do with its health care plan. The rumor is they’ll cut some benefits and raise premiums. AThat’s better than my last employer, who only offered a high-deductible plan. But how will health reform impact what my employer does? – B. Williams, Fort Myers, Fla.

A: We can’t say exactly what your new employer will do, but your best bet is to check with human relations, or at least the person who hired you. Don’t worry, your company won’t think less of you for asking.

For now, we can help by laying out some facts on health care that might influence your company's decision.

First, expect your premiums to rise, right now and down the road. According to the U.S. Office of the Actuary, Americans are heading toward significantly higher health care costs in the coming years. By 2019, the USOA says that we’ll spend an average of $13,652 per person on health care. Another study from PriceWaterhouseCoopers says that health care costs will grow by 9% in 2011.

How might your employer be impacted by those numbers? It’s easier to gauge short-term. According to the PriceWaterhouseCoopers study, we can expect the following trends among employers when it comes to health care plans:

  • In 2011, 63% of employers say they will hike premiums.
  • Another 46% will raise the limit on yearly out-of-pocket payments.
  • Nearly half of the survey respondents, or 44%, say they will raise deductibles for in-network services.
  • Over half of employers, or 61%, say they will offer health savings account plans, also known as consumer-directed plans. Such plans allow employers to save on up-front costs, emphasizing a high-deductible component.
  • Expect more emphasis on wellness programs. Just a tad over half of the PriceWaterhouseCoopers survey respondents, or 56%, say that wellness programs represent one of the three tops ways to curb health care costs.
  • Most companies say they will abide by the brand new provisions of the new health care reform law, including the removal of lifetime limits on benefits. Still, a company can’t decline coverage if you’re already sick. Health plans will also have to cover your adult children up to the age of 26. Those are mandated to all health insurance providers, and all of those new provisions will kick in this week.

It’s likely your firm will raise your health care costs somewhere around 10% if the national average is in the ballpark. It will also likely raise deductibles and annual out-of-pocket payment limits. But your company will likely abide by the new health care law for now, although expect your employer to check every nook and cranny for ways to cut costs on your plan.

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