With the passing of the Affordable Care Act (ACA) in 2010, employers faced a complex challenge: aggregating and managing workforce data from unrelated payroll, benefits and human resource information system (HRIS) each month – something that had never been done before. Health e(fx) is in the business of helping employers model and manage their HR data through a unique software system.
We decided to create a first of its kind report to examine the impact of healthcare reform on employer-sponsored plans. We found three key insights: most employers are more generous than the ACA requires; lower pay is connected to low eligibility and enrollment rates; and health plan selection varies by income and industry. Below is a snapshot of these insights and what they might mean for you.
Despite skepticism that employer-sponsored coverage would survive implementation of the ACA, our data shows that employer coverage has thrived. In fact, 88% of employers do not strictly follow ACA eligibility requirements. Instead, they go above and beyond for their employees. While it varies by industry – for example, employers in health and medical services are more likely to be more generous – companies are likely seeing a positive return on offering generous health coverage, such as improved health, and increased productivity and loyalty from employees.
Lower Pay, Lower Enrollment
Employees often have choices when it comes to their health plan; however, those choices may be limited by their income. Our data revealed that the percent of employees who are eligible and enroll in employer sponsored health plans rises as income levels increase, with a significant difference between those with pay at 100% of the Federal Poverty Level (FPL) and those with pay above 400% FPL. Additionally, data showed that the longer employees are with a company, the more likely they are to be enrolled in their employer’s healthcare plan.
Regardless of where healthcare reform stands, considering key demographics such as income and tenure over time can help companies inform their health benefits strategies and retain their workforce.
Variations by Income and Industry
Most large employers offer multiple health plan options to employees, and are oftentimes more charitable with the level of coverage provided. Our data showed that in 2016, 87% of employees were enrolled in a better plan than required by the ACA. Yet, enrollment in those plans varies across income and industry. For example, Bronze plans (60% coverage of medical costs) were the most popular for the Hospitality and Entertainment industry, whereas Platinum plans (90% coverage of medical costs) were the most popular in Education. Correspondingly, employees with income less than 138% of the FPL chose Bronze plans.
The ACA has changed the game when it comes to understanding connections among pay, benefits and HRIS data, and this need will only grow. Our workforce analytics can provide insights to help you understand how healthcare reform will affect your costs and workforce. Download the full 2017 Insights Report to learn more about these insights, and how they can inform your health benefits strategies.
For a full report, go to info.healthefx.us/2017Insights