Employers passive in wake of health reform

If one motive behind reform was to expand employment by making insurance a regular cost of doing business, that's not yet taking hold.

In the immediate wake of health care reform employers, who are the "buyer's side" of health insurance, expressed little appetite for change in a benefits survey from the International Federation of Employer Benefit Plans.

This is true despite the fact that, unless they do act, employers will see another 9% jump in health care costs next year, which would mean another doubling by 2020. (Image from the Corporate Wellness Blog.)

The only idea to draw anything like enthusiastic support were wellness programs, endorsed by 66%. Only about half were even planning on discussing the new law with employees, either now or during annual enrollment.

The passivity might be explained in part by the date on the report, May. The bill only passed in March, and it's possible that benefit managers were still digesting it when the survey hit their desks.

It's no secret that most employers opposed the reform plan, spurred by rhetoric from groups like the U.S. Chamber of Commerce. But large employers were also prime movers behind health reform. Cost-shifting from insured patients to the uninsured were already causing some to eliminate their plans, and the trend was unsustainable.

The new law includes coverage of several wellness benefits, including annual screenings, while programs like Virgin Healthmiles and United Health's diabetes program are aimed at letting employers participate in savings from keeping employees healthy.

So far these are exceptions. The bending of the cost curve, if it is to take place, will require years.

The group emphasized in its own statement on the survey that 87% of employers plan on continuing coverage, but that would mean one in eight still think they're going to eliminate health insurance for employees.

The group's site on health reform currently notes many employers are "taking deep breaths and waiting to learn what they must do" -- an indication that passivity is considered the right move for now.

If one motive behind reform was to expand employment by making insurance a regular cost of doing business, that's not yet taking hold, either. Workers who have jobs are working longer hours, as employers hold off on new hires as long as possible.

Some economists call this unsustainable, predicting employers will add 200,000 jobs per month through the end of 2010. But salaried employees don't have to be paid overtime, so there is no cost and much profit in just pushing those people harder, knowing they can't quit and find new work.