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SHRM Poll: Organizations' Response to Health Care Reform
1.
SHRM Poll: Organizations’
Response to Health Care Reform June 27, 2010
2.
Health Care Reform
Series: Poll 1 Introduction 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 the implications for employers and employees. The findings from the first poll in this series, which was conducted in June 2010, are included in this presentation. Organizations’ Response to Health Care Reform | ©SHRM 2010 2
3.
Key Findings •
Will Organizations Drop Health Care Coverage? Nearly one-half of organizations (46%) have decided not to drop health care coverage for employees as a result of the new health care reform law. Of these organizations, 34% made this decision without conducting an analysis to determine whether to continue offering health care coverage or to drop coverage and pay opt-out fines. Twelve percent did conduct such analysis and decided not to drop coverage. More than one-third of organizations (37%) are still conducting or plan to conduct an analysis on the impact of health care reform. • Will Employees Pay More? Forty-one percent of organizations indicated that they are likely to pass increased health care coverage costs to employees in 2011, regardless of whether these costs are directly related to the new health care reform law. • Alternative Health Care Plans on the Rise? Thirty-four percent of organizations are considering alternative health care plans for employees as a result of the new health care reform law. • The Impact of Dropping Health Care on Organizations. Regardless of whether it was economically more sound, the primary reasons behind the organizations’ decisions not to drop health care coverage were: 1) it would lower employee morale and job satisfaction, 2) it would make organizations non-competitive in recruiting new employees, and 3) it would send the message that the organization does not value the health of its employees. • It Is Too Early to Tell: The primary reason organizations would be likely to drop health care coverage and pay opt-out fines is if it would result in significant savings for the organization. Yet 50% of organizations indicated that they are unsure whether their organization would be dropping health care coverage at this time, meaning it is simply too early to tell. Organizations’ Response to Health Care Reform | ©SHRM 2010 3
4.
Is your organization
engaging in an analysis to determine the impact of the new health care reform law on your health care plan? Will not conduct an analysis and already decided we will 34% not drop health care coverage Currently conducting analysis 22% Plan to conduct such an analysis 15% Already conducted an analysis and decided not to drop 12% health care coverage Already conducted an analysis and decided to drop health <1% care coverage Will not conduct an analysis and already decided to drop <1% health care coverage Unsure at this time 16% 0% 10% 20% 30% 40% Note: n = 813. Percentages do not total 100% due to rounding. Organizations’ Response to Health Care Reform | ©SHRM 2010 4
5.
Is your organization
engaging in an analysis to determine the impact of the new health care reform law on your health care plan? Comparison by Organization’s Staff Size and Sector • Currently conducting analysis (by staff size): Larger organizations (those with 500 or more employees) were more likely than organizations with fewer than 500 employees to report that they are currently conducting an analysis on the impact of the health care reform on their health plans. Smaller Organizations Larger Organizations Differences Based on Organization Staff Size •50 to 99 employees (2%) •500 to 2,499 employees Larger organizations > •100 to 499 employees (23%) smaller organizations (9%) •2,500 to 24,999 employees (36%) •25,000 or more employees (40%) • Currently conducting analysis (by sector): Publicly owned for-profits (37%) were more likely than all other sectors to report that they are currently conducting an analysis on the impact of the health care reform on their health plans. Smaller percentages of privately owned for-profits (19%), nonprofits (15%) and government entities (14%) reported conducting such analysis at this time. Organizations’ Response to Health Care Reform | ©SHRM 2010 5
6.
Is your organization
engaging in an analysis to determine the impact of the new health care reform law on your health care plan? Comparison by Organization’s Staff Size and Sector (continued) • Will not conduct an analysis and already decided that organization will not drop health care coverage (by staff size): Smaller organizations (those with fewer than 2,500 employees) were more likely than organizations with 2,500-24,999 employees to report that they will not conduct an analysis and have already decided that they will not drop health care coverage. Smaller Organizations Larger Organizations Differences Based on Organization Staff Size •50 to 99 employees (49%) •2,500 to 24,999 Smaller organizations > •100 to 499 employees employees (25%) larger organizations (40%) •500 to 2,499 employees (40%) • Will not conduct an analysis and already decided that organization will not drop health care coverage (by sector): Privately owned for-profits (35%), nonprofits (38%) and government entities (50%) were more likely than publicly owned for-profits (24%) to have not conducted an analysis and have already decided not to drop employee health care coverage. Organizations’ Response to Health Care Reform | ©SHRM 2010 6
7.
Will your organization
pass on to employees any increased or decreased health care coverage costs (e.g., premiums, co-pays, etc.) in 2011 that may be directly or indirectly related to the new health care reform law? 50% 41% 40% 30% 30% 25% 23% 23% 20% 20% 15% 10% 10% 10% 2% 0% Highly unlikely Unlikely Likely Highly likely Unsure at this time Increased costs (n = 814) Decreased costs (n = 813) Note: Percentages may not total 100% due to rounding. Organizations’ Response to Health Care Reform | ©SHRM 2010 7
8.
Is your organization
considering alternative health care plans (e.g., less expensive coverage plans, health savings accounts, self-funding, etc.) as a result of the new health care reform law? 40% 36% 34% 30% 30% 20% 10% 0% Yes No Unsure at this time Note: n = 813. Organizations’ Response to Health Care Reform | ©SHRM 2010 8
9.
Even though it
may be an economically sound decision for your organization to drop health care coverage and pay the opt-out fine, what would be your organization’s primary reason for keeping health care coverage? Dropping health care coverage would lower employee 41% morale and satisfaction Dropping health care coverage would make us non- 33% competitive in recruiting new employees Dropping health care coverage would show that we do not 28% value the health of our employees Dropping health care coverage would significantly increase 26% employee turnover at all levels of the organization Dropping health care coverage would make us non- 26% competitive in retaining top employees N/A - Offering/keeping health care coverage is more 11% economically sound for my organization Unsure at this time 7% Other 5% 0% 10% 20% 30% 40% 50% Note: n = 819. Respondents were asked to select their two primary reasons. Organizations’ Response to Health Care Reform | ©SHRM 2010 9
10.
Even though it
may be an economically sound decision for your organization to drop health care coverage and pay the opt-out fine, what would be your organization’s primary reason for keeping health care coverage? Comparison by Organization’s Staff Size • Dropping health care coverage would lower employee morale and satisfaction (by staff size): Smaller organizations (those with fewer than 2,500 employees) were more likely than organizations with 2,500 to 24,999 employees to report that dropping health care coverage would lower employee morale and satisfaction. Smaller Organizations Larger Organizations Differences Based on Organization Staff Size •50 to 99 employees (54%) •2,500 to 24,999 Smaller organizations > •100 to 499 employees employees (27%) larger organizations (43%) •500 to 2,499 employees (46%) Organizations’ Response to Health Care Reform | ©SHRM 2010 10
11.
If it were
an economically sound decision and your organization would be likely to drop health care coverage and pay the opt-out fine, what would be your organization’s primary reason for doing so? Dropping health care coverage would save the organization 32% substantial amount of money Dropping health care coverage and providing an equal amount of compensation to employees to replace the loss 14% would be viewed positively by employees Dropping health care coverage would encourage employees to take more responsibility for making sound 9% health care decisions Dropping health care coverage would ultimately lower 9% employees’ total contributions to their health coverage Not applicable; Would not drop health care coverage 10% Unsure at this time 50% Other 5% 0% 10% 20% 30% 40% 50% 60% Note: n = 819. Respondents were asked to select their two primary reasons. Organizations’ Response to Health Care Reform | ©SHRM 2010 11
12.
Demographics: Organization Industry
Industry Manufacturing—other 14% Health care, social assistance (e.g., nursing homes, EAP providers) 12% Financial services (e.g., banking) 7% Government/public administration—federal, state/local, tribal 7% Services—professional, scientific, technical, legal, engineering 7% Retail/wholesale trade 6% Educational services/education 5% Insurance 5% Construction, mining, oil and gas 3% Note: n = 796. Percentages do not total 100% due to rounding. Organizations’ Response to Health Care Reform | ©SHRM 2010 12
13.
Demographics: Organization Industry
(continued) Industry High-tech 3% Other services (e.g., nonprofit, church/religious organizations) 3% Utilities 3% Consulting 2% Services—accommodation, food and drinking places 2% Telecommunications 2% Transportation, warehousing (e.g., distribution) 2% Arts, entertainment, recreation 1% Biotech 1% Manufacturing—auto/auto-related 1% Publishing, broadcasting, other media 1% Real estate, rental, leasing 1% Association—professional/trade 1% Pharmaceutical 1% Other 9% Note: n = 796. Percentages do not total 100% due to rounding. Organizations’ Response to Health Care Reform | ©SHRM 2010 13
14.
Demographics: Organization Sector
Privately owned for-profit organization 44% Publicly owned for-profit organization 24% Nonprofit organization 19% Government sector 8% Other 5% 0% 10% 20% 30% 40% 50% 60% Note: n = 794 Organizations’ Response to Health Care Reform | ©SHRM 2010 14
15.
Demographics: Organization Staff
Size 50% 40% 32% 30% 28% 25% 20% 9% 10% 6% 0% 50 to 99 employees 100 to 499 employees 500 to 2499 2500 to 24999 25000 or more employees employees employees Note: n = 688 Organizations’ Response to Health Care Reform | ©SHRM 2010 15
16.
Demographics: Other
Does organization have U.S.-based Is organization a single-unit company or a multi- operations (business units) only or unit company? does it operate multinationally? Single-unit company: 28% U.S.-based operations 74% Companies in which the location and the company Multinational operations 26% are one and the same. Multi-unit company: 72% Companies that have more Note: n = 803 than one location. Note: n = 813 • 20% of organizations indicated that Are HR policies and practices determined by employees at their work location were the multi-unit corporate headquarters, by each unionized. work location or both? Note: n = 791 Multi-unit headquarters determines 60% HR policies and practices Each work location determines HR 2% policies and practices A combination of both the work 38% location and the multi-unit headquarters determine HR policies and practices Note: n = 603 Organizations’ Response to Health Care Reform | ©SHRM 2010 16
17.
SHRM Poll: Organizations’
Response to Health Care Reform Methodology • Response rate = 15% • Sample comprised of 819 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 June 16–June 23, 2010 For more poll findings, visit: www.shrm.org/surveys Follow us on Twitter: http://twitter.com/SHRM_Research Organizations’ Response to Health Care Reform | ©SHRM 2010 17
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