The cost of health care has long been a top concern for businesses. Many organizations continue to face challenges in balancing coverage expenses against budgets. As more companies in the United States prepare to meet the provisions outlined by the recent health care overhaul, workers are likely to see significant changes to their benefits programs due to compliance efforts and cost management strategies.

According to a survey of major corporations from the National Business Group on Health (NBGH) this month, 53 percent of employers are planning to make changes to their health plans in 2011, despite lingering uncertainties about Patient Protection and Affordable Care Act requirements. Nineteen percent of employers expect to scale back changes they planned to make next year, while the same percentage aren't planning to make any changes.

Among the employers planning to make specific modifications to their health care benefits to comply with new regulations, 70 percent will remove lifetime dollar limits on overall benefits, while 37 percent plan to change annual or lifetime limits on specific benefits. Twenty-six percent plan to remove annual dollar limits on overall benefits, and 13 percent will eliminate pre-existing condition exclusions for children.

The NBGH survey, based on responses from 72 of the largest U.S. companies and representing more than 3.7 million workers, found that rising health care costs are likely to shape benefit planning in the near-future. Large employers are budgeting for an average increase of 8.9 percent in health care costs in 2011, compared to the 7 percent average increase reported for 2010, although the health care reform legislation is estimated to account for only 1 percentage point of the 2011 increase.

"While the health reform law has forced employers to evaluate their health care benefit strategies and decide whether to comply with the law or lose grandfathered status, they haven't lost sight of the fact that controlling rising costs remains one of, if not, their highest priority," Helen Darling, president of the NBGH, said in an announcement of the findings. "They have to foot the bill, not the government."

Due to the anticipated rise in costs, many employers are already looking for ways to curb potential cost increases by restructuring benefits payments or shifting part of the burden onto employees.

"About 57 percent of the employers in today's study said their workers paid a higher portion of their premiums this year, and 36 percent of the companies increased the out-of-pocket maximums this year," Bloomberg News reports. "Companies said they plan to offer more so-called consumer-directed health benefits, such as insurance with high deductibles paired with tax-free health savings accounts."

Specifically, 63 percent of employers plan to increase the percentage employees must contribute to premium costs in 2011, 46 percent will raise employees' out-of-pocket maximums and 44 percent will raise in-network deductibles, according to the NBGH survey.

Only 3 percent of employers are adopting a new voluntary benefits program that would help offset long-term-care costs in 2011, the first year such a program would be allowed, although 30 percent of companies are reviewing the option.

"The program would let workers divert a small amount of money from their paychecks into a trust fund that would provide a benefit of no less than $50 a day when they need it for home care, assisted living or nursing-home care," Dow Jones explains. "Employees must contribute to the fund for at least five years and meet certain health criteria to be eligible for benefits."

Despite the elevated costs and possibly increased financial burden on employees, an August report from business consultancy Towers Watson forecasts that health care consumption will actually increase over the next year thanks to the implementation of low-cost or no-cost preventive care services in many employer-based plans.

However, "[i]mplementing the new preventive care benefits will not be painless: Insurers and employers will face cost increases of 1 percent to 2 percent," Towers Watson explains. "With an annual 2010 average per covered employee health cost of just over $10,000, this means employers will see an increase of $100 to $200, which will be in addition to expected average annual cost increases of 8 percent to 10 percent. Many employers will be scrambling to communicate these new benefits to employees in time for open enrollment in early fall."

Earlier

Health Care Reform's Impact on Small Biz

Which Health Benefits Can We Still Count On?

Cut Costs, Keep Health Care

Resources

Large Employers' 2011 Health Plan Design Changes
National Business Group on Health, August 2010

The Patient Protection and Affordable Care Act
The U.S. Senate, Jan. 5, 2010

Majority of Large Employers Revising Health Benefit Programs for 2011...
National Business Group on Health, Aug. 18, 2010

Paychecks to Shrink Because of Higher Health Premiums
by Jeffrey Young
Bloomberg News, Aug. 18, 2010

Consumer Health: Large Employers Recast Health Plans for 2011
by Kristin Gerencher
Dow Jones, Aug. 18, 2010

...Reform to Drive Increase in Health Care Consumption
Towers Watson, Aug. 23, 2010