July 30, 2012: From the desk of SHADAC Director Lynn Blewett

The most recent in a line of employer benefit surveys--this one administered by Deloitte—finds that nine percent of companies expect to stop offering health coverage in the next one to three years, 81 percent plan to continue offering coverage, and 10 percent are not certain what they will do.  Most employers reported that they offer health benefits to attract and retain employees and sustain job satisfaction.

Kathryn Mayer of BenefitsPro provides a useful comparison of recent survey estimates of likely employer-sponsored insurance (ESI) offerings under the Affordable Care Act.  The surveys were done by Mercer, the International Foundation of Employee Benefit Plans (IFEBP), Deloitte, Oliver Wyman, Towers Watson, and McKinsey.  The percent of employers likely to drop coverage ranges from one percent, reported by IFEBP, to 30 percent, reported by McKinsey.  (McKinsey is the most notable outlier and has been criticized regarding its methods and the motives behind them.)

The surveys that Mayer cites are certainly not apples-to-apples comparisons, with some looking at different employer sizes than others and with key differences in survey methods.  However, it does appear that the surveys are converging over time on a modest eight to 10 percent drop rate, excluding the outliers from IFEBP and McKinsey.  Even with the IFEBP and McKinsey outliers included, the average anticipated drop rate is 11.17 percent.  This would seem to contradict the fear that employers will drop coverage in large numbers under health reform.  Certainly nine percent is not an insubstantial proportion of employers, but a nine percent drop would not signal the end of traditional employer-sponsored coverage, either.