Peter KilmartinBoston MA617 747 9355

HEALTH CARE REFORM UPDATE FOR RIBGHTHE ROAD TO IMPLEMENTATIONJUNE 14, 2013

Not Peer Reviewed

NEW SURVEY RESULTSTHE ROAD TO IMPLEMENTATION

•Released Jun 12, 2013 (2 days ago!)•Almost 900 employer participants

© 2013 MercerThis is for informational purposes only, and is not intended to be used as legal advice.

04/20/23

The Most Disruptive Requirement for the Most Employers: Extending Coverage to all Employees Working 30 or More Hours per Week

Retail and hospitality

Financial services

Health care services

Government Other servicesTransportation/Communication/

Utility

Manufacturing

One-third of all survey respondents currently do not offer coverage to all employees working 30+ hours per week

Percent of employers that currently do not offer coverage in a qualified plan to all employees working an average of 30 or more hours per week

3

46% 46%42%

39%

34%

25%22%

Source: Mercer’s Survey on Health Care Reform: The Road to Implementation

© 2013 MercerThis is for informational purposes only, and is not intended to be used as legal advice.

04/20/23

A 12-Month Look-Back Period is the Most Common…But a Third of Respondents Haven’t Decided What Period To Use

Will use 12-month look-back period

Other period

3 month period

6 month period

33%

3% 13%

47%

Don’t know yet

4%

Among respondents that track and record hours for employees working variable hours (a Shared Responsibility issue)

4Source: Mercer’s Survey on Health Care Reform: The Road to Implementation

© 2013 MercerThis is for informational purposes only, and is not intended to be used as legal advice.

5April 20, 2023

Expected cost increase due to ACA requirements effective in 2014

59%

47%

39% 38% 36%31%

24%

Retail and

hospitality

Other services

Manufacturing

Government

Health care

servicesFinancial

services

Transportatio

n/

Communication/Utili

ty

Expect cost increase of 3% or more due to ACA requirements effective in 2014, by industry

Source: Mercer’s Survey on Health Care Reform: The Road to Implementation

In 2011, 25% of Employers Thought ACA Would Have Little or No Impact on Their Costs…Only 9% Think So Now

18%19%

21%

9%

32%

Don’t know

Increase of 1%–2%

Increase of 5% or more

Increase of less than 1%

Increase of 3%–4%

STRATEGIES FOR 2014 AND BEYOND

© 2013 MercerThis is for informational purposes only, and is not intended to be used as legal advice.

04/20/23

Taking Steps Now to Avoid the Excise Tax in 2018

39%

4%

6%

28%

48%

54%

Introduce a CDHP or take steps to increase enrollment in an existing CDHP

Drop a higher-cost health plan

Add or expand health management programs

Eliminate health care FSAs

Unbundle dental and medical plans

Other change(s)

Based on the 36% of respondents who say changes they are making for 2014 are influenced by their concerns over the 2018 excise tax

7Source: Mercer’s Survey on Health Care Reform: The Road to Implementation

© 2013 MercerThis is for informational purposes only, and is not intended to be used as legal advice.

8April 20, 2023

About a Third of Respondents are Considering Switching to a Private Exchange to Deliver Benefits to Retirees or Actives Within Two Years – and Nearly Half Would Consider Switching Within Five Years

33%

22%18% 16%

47%

41%

22%

14%

In 2 years

In 5 years

Active employees Pre-Medicare-eligible retirees

Medicare-eligible retirees

Considering private exchanges for either actives or retirees

Source: Mercer’s Survey on Health Care Reform: The Road to Implementation

© 2013 MercerThis is for informational purposes only, and is not intended to be used as legal advice.

9April 20, 2023

Final Wellness RegulationsProgram Types

Participatory

No health standard to

meet

1. Annual opportunity

2. Limited reward: 30% / 50% max

3. Personal physician recommendations

4. Reasonably designed

5. Notice and disclosure

Health-contingent

Mercer is not engaged in the practice of law and this report, which may include commenting on legal issues or regulations, does not constitute and is not a substitute for legal advice. Accordingly, Mercer recommends that employers secure the advice of competent legal counsel with respect to any legal matters related to this report or otherwise.

The information contained in this document and in any attachments is not intended by Mercer to be used, and it cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or imposed by any legislative body on the taxpayer or plan sponsor.

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