The New Health Dialogue

A few quick highlights from the annual Mercer survey on employer sponsored health coverage released Tuesday. (The full report will be out later this month.)

The key finding: Asked whether they will stop providing health coverage when the exchanges start running in 2014, most employers said, “Not likely.”

Big employers were particularly unlikely to anticipate dropping coverage, absorbing the penalty, and letting workers buy insurance through the exchanges. Only six percent of employers with 500 or more employees -- and three percent of those with 10,000 or more -- say they are likely to terminate their health plans and send workers to the exchange.Small employers, as one might expect, were more likely to anticipate a shift to the exchange. One in five employers with 10 to 499 employees said they are likely to terminate their health plans. Small employers of course have been dropping coverage or shrinking their contribution to worker coverage or shifting costs to workers for years. The health reform law takes several steps -- including tax credits for eligible small businesses and SHOP exchanges to help small businesses be part of a larger, fairer purchasing pool -- to help small business cover their workers. (Also, it's important to note that some of the exchange policies will be more comprehensive than what small businesses can currently afford -- and many individuals will be eligible for federal affordability subsidies when purchasing coverage on the exchange.)

“You can see why the idea of dropping employee health plans would be attractive to small employers,” Beth Umland, who directed the study for Mercer, said in a statement released by the consulting company. “On the other hand, when you look at the experience in Massachusetts, where insurance exchanges have been operating under state-based health reform for over three years, it hasn’t happened.”

More on cost concerns and how employers view the 2018 excise tax here.