Since Congress passed the Patient Protection and Affordable Care Act in 2010, pundits and policymakers have debated whether employers will continue to offer health insurance coverage.Stock Photo

Most large employers, it turns out, are committed to providing health benefits in the short term. But ask them about the long haul, and the forecast is much cloudier, according to findings from the 2012 Towers Watson/National Business Group on Health "Employer Survey on Purchasing Value in Health Care."

Just 3 percent of employers say they are somewhat or very likely to discontinue health insurance plans in 2014 or 2015 for employees without providing any financial help to purchase coverage.

But only 23 percent of companies are very confident they will continue to offer health care benefits for the next 10 years -- down from 73 percent just five years ago.

That's a huge shift for big companies, says Julie A. Stone, a senior consultant with Towers Watson, a global consulting firm.

"Five or six years ago, if you raised the prospect of not offering health benefits, people would look at you and say, 'Where are you coming from?'" she says.

With all the changes coming in the next few years, it's difficult for employers to predict what the health care system will look like in 10 years, much less what their role will be in providing coverage.

3 big health insurance changes in 2014

Three of the biggest health care reform changes will occur in 2014:

  • The health insurance exchanges will open. The exchanges will serve as marketplaces where individuals and small groups can buy health insurance. People whose incomes fall below a certain level will qualify for federal subsidies to help them afford the premiums.
  • Virtually everyone will be required to have health insurance under the so-called individual mandate. (The U.S. Supreme Court is expected to rule in June on whether the mandate is constitutional.)
  • Health insurance companies will no longer be able to exclude coverage or charge higher premiums for people with health conditions. Today, it's terribly expensive or impossible to buy individual health insurance coverage for some pre-existing conditions. This is why group health insurance through an employer is critical for so many people.
Employers with at least 50 full-time workers will pay a financial penalty in 2014 if they don't offer affordable health insurance benefits and at least one of their employees qualifies for a federal premium subsidy. The penalty, though, is far less than the cost of providing health insurance, so debate has focused on whether employers will choose to "pay or play."

But the issue isn't so simple, Stone says. Employers are looking at an array of options to provide competitive benefits yet still contain costs.

About 45 percent of employers are considering offering health benefits to only a portion of their workers and directing others to the exchanges. Some of these employers will provide financial subsidies to help their workers buy health coverage. This could make sense for low-income workers who qualify for federal premium subsidies, Stone says. With the combined subsidies from the federal government and their employers, the workers would have a decent shot at affording health insurance.

Cost-cutting a certainty

Meanwhile, one thing is certain: Employers that offer health insurance coverage will continue to look for ways to contain costs. Among the biggest trends is the use of financial rewards and penalties to encourage workers to manage their health better. Various wellness rewards programs are offered by Aetna, Blue Cross Blue Shield of Texas, CIGNA, Humana and many other insurers.

More than two-thirds of the surveyed employers offer incentives for improving health, and 20 percent financially penalize employees for unhealthy behavior, such as smoking. About 10 percent reward or penalize employees based on whether they achieve health goals, such as losing weight or controlling cholesterol, and 23 percent plan to do so next year.

The Towers Watson/National Business Group on Health study is based on a survey conducted in December 2011 and January 2012 of 512 employers with at least 1,000 workers.