With the introduction of and the quick movement out of committees in the House, the American Health Care Act (AHCA) may roll back several Affordable Care Act (ACA) provisions.  These may include the out of pocket expenses cap and the Premium Tax Credits that lower health care premiums between 2.5%-9.5% of household income for employees who are not provided health care or opt out of employer health care.

Most of the current push to repeal the ACA has appeared to be more political than practical.  In fact, down the road, employer sponsored health care will likely be taxable compensation to the employee.  The AHCA is maintaining the requirement to report the value of the health insurance on the employee’s W-2.  Further, Bush, Obama and Trump have proposed taking the tax advantage of employer health insurance away. The reason for this push is that experts believe the tax benefits distort healthcare markets by increasing healthcare spending. Experts also believe that the consumer needs to be more sensitive to the costs of healthcare, which may push markets to lower healthcare costs.  Finally, it will allow increased revenues for social security and Medicare, although employees will likely get an income tax deduction for the amount of the taxable healthcare benefit.

Surprisingly, nowhere in any calculation has been a question of what employees want.  In general, employees want their children covered until age 26 on their policies, preexisting conditions covered, and keeping the out of pocket cap.  But what else do employees want?

In 2015 the Employee Benefit Research Institute (EBRI) conducted a survey asking workers about employment-based health coverage.  The survey results were released in March 2016. So what do employees want?

·       A majority of employees want to keep their health insurance level benefits:

o   One-half of those with employment-based health insurance coverage are extremely (12%) or very satisfied (38%) with their current plans, and 41% are somewhat satisfied.

o   One-third of workers would change the mix of wages and health benefits: 14% say they would trade wages to get more health benefits, and 20% say they would surrender some health benefits for higher wages.

o   Nearly one-half of workers report that they would give up a wage increase to maintain their current health coverage.

·       There is an increasing movement for more wages if it means less health benefits.  The percentage of workers reporting that they would rather have fewer health benefits and higher wages has doubled, increasing from 10% percent to 20%.  This finding could be more in line with the changing demographics of the workforce.

·       More employees want to be involved in deciding what healthcare coverage they want – not the employer one size fits all plan. 

o   17% prefer their employer to give them the money and allow the workers to decide whether to purchase coverage at all and how much to spend. 

o   Choice of health plans is important to workers, and many say they would like more choices. 93% report that choice of health plan is extremely important (41%), very important (39%), or somewhat important (17%).

Although current employee sentiment is to keep things status quo, there is a growing movement for more control over the selection of benefits.  As the demographics play out and Millennials become the predominant generation in the workplace, the healthcare marketplace may be the future for all healthcare.  A 2016 Accenture report finds that private health insurance exchange enrollment increased 35% to 8 million employees, with midsize employers leading the way to this approach.  In the long run, employers who embrace healthcare exchanges will find greater and more predictable cost control while satisfying employees’ desire for control over choices – helping them to become employers of choice for the new generations entering the workforce. 

Source:  Business Insider 2/22/17, Accenture 2016