Shrm poll health_care3final

February 7, 2011

SHRM Poll:

Health Care Reform: Where Are Organizations

in the Decision-Making Process?

Health Care Reform - Where Are Organizations in the Decision-Making Process | ©SHRM 2011

Health Care Reform Series: Poll 3Introduction

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 its implications for employers and employees. This presentation covers the findings from the third poll in this series, which was conducted in December 2010.

2


Key Findings

• Will Organizations Drop Health Care Coverage? One-half of organizations (51%) have decided

not to drop health care coverage for employees as a result of the health care reform law. Of these

organizations, 24% 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. Twenty-seven

percent did conduct such analysis and decided not to drop coverage. Nearly one-third of

organizations (27%) are still conducting or plan to conduct an analysis on the impact of health care

reform.

• Many Organizations Waiting on Regulatory Guidance. Nearly one-half of organizations (48%)

indicated that they are waiting on regulatory guidance or information on specific provisions in the

health care reform law to make some health care decisions for their organizations.

• What Are the Implementation Barriers? For a number of provisions in the health care law that will

take effect between 2011 and 2018, 27% to 65% of organizations reported that there are no

implementation barriers for their organizations. Of the organizations that reported implementation

barriers, 54% reported the cost of including benefits for adult children up to age 26 (2011) as an

implementation barrier. In addition, one-third (34%) of organizations reported employee out-of-

pocket expenses as an implementation barrier to their organization putting into action the exclusion

on purchasing over-the counter medications using flexible spending account (2011).

• HR Knowledge About Law’s Specifics Steadily Increasing. The percentage of HR professionals

who are comfortable with their level of familiarity with the health care reform law increased from

48% in July 2010 to 62% in January 2011.

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16%

<1%

<1%

22%

15%

12%

34%

22%

<1%

<1%

10%

17%

27%

24%

0% 10% 20% 30% 40%

Unsure at this time

Will not conduct an analysis and already decided to drop health care coverage

Already conducted an analysis and decided to drop health care coverage

Currently conducting analysis

Plan to conduct such an analysis

Already conducted an analysis and decided not to drop health care coverage

Will not conduct an analysis and already decided we will not drop health care coverage

January 2011, n = 677 June 2010, n = 813

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Is your organization engaging in an analysis to determine the impact of the health care reform law on your health care plan?

• One-half of organizations (51%) have decided not to drop health care coverage for

employees as a result of the health care reform law compared with 46% in June 2010.

Note: Percentages do not total 100% due to rounding. June 2010 data are from SHRM Poll: Organizations’ Response to Health Care Reform.


Is your organization engaging in an analysis to determine the impact of the new health care reform law on your health care plan?

Differences Based on Medical

Benefit Funding

Already conducted an analysis and decided not to drop health care coverage Self-insured (33%) > insured

(20%)

Will not conduct an analysis and already decided we will not drop health care coverage Insured (31%) > self-insured (18%)

Unsure at this time Insured (26%) > self-insured (18%)

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Comparison by Medical Benefit Funding

Organizations with self-insured plans were more likely to have already conducted analysis and decided NOT to drop health care coverage.


Is your organization waiting to make any health care plan decisions based on any of the following factors?

Yes No Don’t know

Regulatory guidance or information on specific provisions in the health care reform law 48% 42% 10%

Changes to specific provisions in the health care reform law 32% 57% 11%

Repeal of specific provisions of the health care reform law 24% 64% 12%

Repeal of the entire health care reform law 13% 75% 12%

Other factors 13% 53% 35%

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Note: n = 617-674. Percentages do not total 100% due to rounding. Data sorted by “Yes” column.


Is your organization waiting to make any health care plan decisions based on any of the following factors?


Benefit Funding

Regulatory guidance or information on specific provisions in the health care reform law Self-insured (54%) > insured

(42%)

Changes to specific provisions in the health care reform lawSelf-insured (36%) > insured

(28%)

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Comparison by Medical Benefit Funding


For the following provisions of the health care reform law, what do you see as the main implementation barrier in your organization?

Th

ere

is n

o

imp

lem

en

tati

on

barr

ier

for

my

org

an

izati

on

Lack o

f

un

ders

tan

din

g

of

the d

eta

ils

of

the law

pro

vis

ion

Co

st

of

imp

lem

en

tati

on

to t

he

org

an

izati

on

Em

plo

yee

ou

t-o

f p

ocket

co

st

Lack o

f

su

pp

ort

by

em

plo

yees,

un

ion

s o

r

Man

ag

em

en

t

Oth

er

Limits on deductibles in the small group market (companies with less

than 100 employees) to $2,000 for individuals and $4,000 for families

(2014) 65% 8% 18% 3% 2% 4%

Prohibition on lifetime dollar limits on coverage of essential benefits

(2011) 52% 8% 32% 4% 1% 4%

Exclusion on purchasing over-the counter medications using flexible

spending account (2011) 43% 13% 1% 34% 8% 2%

Inclusion of benefits for adult children up to age 26 (2011) 37% 4% 54% 2% 1% 2%

Employer mandate to provide coverage or pay a penalty (2014) 37% 17% 37% 1% 4% 4%

Excise tax on high-value (so-called "Cadillac") health plans (2018) 34% 19% 28% 7% 8% 4%

Requirement to report the value of an employee's health benefits on

individual employee W-2s (W-2s for 2012 tax year) 30% 17% 38% 2% 6% 7%

Tax form 1099 requirement for all vendor transactions above $600

(2012) 29% 22% 39% 0% 2% 7%

CLASS Act (government-provided long-term care insurance) (2011-

2013) 27% 48% 12% 3% 3% 6%

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Note: n = 674-698. Percentages do not total 100% due to rounding. Data sorted by first column.


What is your level of agreement with the following statement:"I am comfortable with what I know about the new health care reform law."

0%

10%

20%

30%

40%

50%

60%

Strongly disagree Disagree Agree Strongly agree

11%

41%

45%

3%6%

32%

54%

8%

July 2010, n = 774 January 2011, n = 679

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• The percentage of HR professionals who are comfortable with their level of knowledge about the health care reform law increased from 48% in July 2010 to 62% in December 2010. This shows that more HR professionals are quickly familiarizing themselves with the health care reform law, thereby helping their organizations with the implementation of the law.

Note: July 2010 data are from SHRM Poll: Organizations’ Response to Health Care Reform—Challenges and Actions.


What is your level of agreement with the following statement:"I am comfortable with my level of knowledge about the CLASS Act provision (government-run long-term care insurance) in the health care reform law."

0%

10%

20%

30%

40%

50%

60%

Strongly disagree Disagree Agree Strongly agree

28%

58%

12%

2%

10Note: n = 678

• Only 14% of HR professionals are comfortable with what they know about the CLASS Act provision. Nearly half of organizations (48%) indicated that lack of understanding of the details of the CLASS Act provision as an implementation barrier to their organizations.


12%

17%

30%

42%

54%

73%

8%

30%

45%

50%

47%

69%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Other

Internal experts

Consultants

Legal counsel (internal or external)

SHRM’s resources on the new health care reform law

Insurance broker

January 2011, n = 663 July 2010, n = 759

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What resources is your organization currently using in regard to the health care reform law?

Note: Percentages do not total 100% as multiple responses were allowed. Respondents were allowed to select their top two options. July 2010 data

are from SHRM Poll: Organizations’ Response to Health Care Reform—Challenges and Actions.



• Insurance broker (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 they are currently using insurance brokers as one of their resources in regard to the new law.

• SHRM’s resources on the health care reform law (by staff size): Smaller organizations were more likely than organizations with 2,500 to

24,999 employees to report that they are currently using SHRM’s information as one of their resources in regard to the new law.

• Legal counsel (internal or external) (by staff size): Larger organizations (those with 500 or more employees) were more likely than

smaller organizations (100 to 499 employees) to report that they are currently using legal counsel as one of their resources in regard to the

new law.

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Comparison by Organization Staff Size

Smaller Organizations Larger Organizations Differences Based on

Organization Staff Size

•50 to 99 employees (84%)


•500 to 2,499 employees (74%)

•2,500 to 24,999 employees

(55%)Smaller organizations > larger

organizations



•100 to 499 employees (38%) •500 to 2,499 employees (54%)


(68%)

•25,000 or more employees

(68%)

Larger organizations > smaller

organizations





•500 to 2,499 employees (52%)



organizations



• Consultants (by staff size): Larger organizations (those with 2,500 to 24,999 employees) were more likely than organizations with 100 to

2,499 employees to report that they are currently using consultants as one of their resources in regard to the new law.

• Internal experts (by staff size): Larger organizations (those with 2,500 to 24,999 employees) were more likely than smaller organizations

(100 to 2,499 employees) to report that they are currently using internal experts as one of their resources in regard to the new law.

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Comparison by Organization Staff Size (continued)




•500 to 2,499 employees (42%)


(67%)Larger organizations > smaller

organizations




•500 to 2,499 employees (27%)


(44%)Larger organizations > smaller

organizations



Differences Based on

Organization Sector

Differences

Based on

Organization’s

Operations

Location

Differences

Based on

Medical Benefit

Funding

Differences

Based on Union

Status

Insurance broker

Privately owned for-profits

(80%) & nonprofits (74%) >

publicly owned for-profits

(53%) & government (47%)

U.S.-based only

organizations (72%)

> multinational

operations (58%)

Insured (81%) > self-

insured (59%)

Non-unionized (72%)

> Unionized (55%)

SHRM’s resources on the new health care reform lawNonprofits (53%) > publicly

owned for-profits (36%)

U.S.-based only

organizations (52%)

> multinational

operations (37%)

Insured (56%) > self-

insured (41%)

Non-unionized (50%)

> Unionized (40%)

Legal counsel (internal or external)Publicly owned for-profits

(61%) > privately owned

for-profits (45%)

Multinational

operations (57%) >

U.S.-based only

organizations (47%)

Self-insured (60%) >

insured (37%)

ConsultantsPublicly owned for-profits

(60%) > privately owned

for-profits (33%)

Multinational

operations (54%) >

U.S.-based only

organizations (41%)


insured (30%)

Unionized (55%) >

non-unionized (42%)

Internal experts

Multinational

operations (38%) >

U.S.-based only

organizations (27%)


insured (23%)

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Comparison by Selected Organizational Demographics

Note: Blank cell indicates that there were no significant differences in this category.

Health Care Reform - Where Are Organizations in the Decision-Making Process | ©SHRM 2011 15

If you use an insurance broker or third-party administrator to help you understand the health care reform law, we would like to understand the primary direction of contacts made between you and the agent. Please select the option below that best characterizes how this process has worked for your organization:

Note: n = 619

8%

13%

13%

14%

17%

35%

0% 10% 20% 30% 40%

My organization has been contacting the broker or third-party administrator proactively and frequently; rarely do they contact

us.

The broker or third-party administrator proactively and frequently contacts us; rarely do we contact them.

My organization has been contacting the broker or third-party administrator on occasion; they do contact us, but somewhat

less frequently than we reach out to them.

We have not used an insurance broker or third-party administrator to help us understand the health care reform law.

The broker or third-party administrator contacts us; we do reach out to them on occasion, but somewhat less frequently

than they do.

The broker or third-party administrator contacts us about as frequently as we contact them.


• The broker or third-party administrator contacts us about as frequently as we contact them (by staff size): Smaller organizations

(those with 500 to 2,499 employees) were more likely than organizations with 2,500 to 24,999 employees to report that the broker or third-

party administrator and the organization have reached out to each other about equal number of times.

• We have not used an insurance broker or third-party administrator help us understand the health care reform law (by sector):

Publicly owned for-profits (27%) were more likely than privately owned for-profits (7%) to report that their organizations have not used an

insurance broker or third-party administrator to help them understand the health care reform law.

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Comparison by Organization’s Staff Size, Sector and Medical Benefit Funding



•500 to 2,499 employees (49%) •2,500 to 24,999 employees


organizations


Benefit Funding

We have not used an insurance broker or third-party administrator to help us understand the

health care reform law Self-insured (18%) > insured (9%)

The broker or third-party administrator contacts us about as frequently as we contact them Self-insured (39%) > insured (31%)

The broker or third-party administrator contacts us; we do reach out to them on occasion, but

somewhat less frequently than they do.Insured (22%) > self-insured (13%)

If you use an insurance broker or third-party administrator to help you understand the health care reform law, we would like to understand the primary direction of contacts made between you and the agent. Please select the option below that best characterizes how this process has worked for your organization:


How is your organization’s primary medical benefit currently funded?

Self-insured, 57%

Insured, 43%

17Note: n = 660


How is your organization’s primary medical benefit currently funded?

• By staff size: Larger organizations (those with 500 or more employees) were more likely than organizations with fewer than 500 employees

to report that their organization’s primary medical benefit is self-insured.

• By operations location: Organizations with multinational operations (69%) were more likely than U.S.-based (52%) organizations to report

that their organization’s primary medical benefit is self-insured.

• By sector: Publicly owned for-profits (70%) were more likely than privately owned for-profits (52%) and nonprofits (49%) to report that their

organization’s primary medical benefit is self-insured.

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Comparison by Organization’s Staff Size, Operations Location, Sector



•100 to 499 employees (36%) •500 to 2,499 employees (66%)


(82%)

•25,000 or more employees

(86%)

Larger organizations > smaller

organizations


Demographics: Organization Industry

Industry

Manufacturing—other 17%

Health care, social assistance (e.g., nursing homes, EAP providers) 14%

Government/public administration—federal, state/local, tribal 8%

Services—professional, scientific, technical, legal, engineering 8%

Financial services (e.g., banking) 6%

Educational services/education 6%

Retail/wholesale trade 4%

Construction, mining, oil and gas 4%

Other services (e.g., nonprofit, church/religious organizations) 4%

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Note: n = 652


Demographics: Organization Industry (continued)

Industry

Transportation, warehousing (e.g., distribution) 4%

Insurance 3%

High-tech 3%

Utilities 3%

Manufacturing—auto/auto-related 3%

Services—accommodation, food and drinking places 2%

Telecommunications 2%

Arts, entertainment, recreation 2%

Real estate, rental, leasing 2%

Consulting 1%

Biotech 1%

Publishing, broadcasting, other media 1%

Association—professional/trade 1%

Pharmaceutical 0%

Other 1%

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Note: n = 652


Demographics: Organization Sector

5%

10%

19%

22%

44%

0% 10% 20% 30% 40% 50% 60%

Other

Government sector

Nonprofit organization

Publicly owned for-profit organization

Privately owned for-profit organization

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Note: n = 651


Demographics: Organization Staff Size

9%

30% 29%27%

6%

0%

10%

20%

30%

40%

50%

50 to 99 employees 100 to 499 employees 500 to 2499 employees

2500 to 24999 employees

25000 or more employees

22

Note: n = 580. Percentages do not total 100% due to rounding.


Demographics: Other

23

Note: n = 665

U.S.-based operations 72%

Multinational operations 28%

Single-unit company: A company in

which the location and the company

are one and the same.

30%

Multi-unit company: A company that

has more than one location.

70%

Multi-unit headquarters determines HR

policies and practices

56%

Each work location determines HR policies

and practices

3%

A combination of both the work location and

the multi-unit headquarters determine HR

policies and practices

41%

Is your organization a single-unit company or a

multi-unit company?

Are HR policies and practices determined by

the multi-unit corporate headquarters, by each

work location or both?

Does organization have U.S.-based

operations (business units) only or

does it operate multinationally?

Note: n = 657

Note: n = 480

• 20% of organizations indicated that

employees at their work location were

unionized.

Note: n = 650


SHRM Poll: Health Care Reform – Poll 3

• Response rate = 13%

• Sample comprises 698 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 +/- 4%

• Survey fielded December 3 – December 31, 2010

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Methodology

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Documents

Shrm poll health_care3final