If a patients’ bill of rights opens up self-insured companies to liability, an increasing number of employers say they’re more likely to drop health plans for their workers, according to a new study.
As managed-care reform legislation gains momentum in Washington, benefits consulting firm Hewitt Associates’ annual survey of employers indicates Corporate America is getting nervous about how proposed patient protection laws may affect their businesses.
A survey of 600 national employers, released Monday by the Lincolnshire-based consulting firm, said 46 percent of companies that sponsor health plans would likely get out of providing health-care coverage if their liability is expanded, compared with 36 percent of employers last year.
Currently, the Employee Retirement Income Security Act protects self-insured plans, which are in place at the majority of the nation’s large employers, from lawsuits.
But employers fear a new law might begin to dismantle ERISA protection.
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“Some employers would get out of the business of sponsoring a company health plan,” said Dave Fortosis, a partner with Hewitt. “That doesn’t mean they would get out of subsidizing health care. [Employers] would have some financial stake but would be more likely to say: Here is some money, go buy your own health coverage.”
Yet the Chicago-based American Medical Association, a chief backer of patients’ rights legislation, says self-insured employers’ fears are unwarranted.
“Unless an employer makes a medical decision–and that is about as rare as hen’s teeth–the employer would not have liability,” said AMA President Dr. Randolph Smoak, a general surgeon from South Carolina. “There is a huge amount of misinformation about what this bill would do.”
Furthermore, Smoak said, employers are unlikely to change their benefits during a period of low unemployment and a tight labor market. “Health coverage is a perk that is high on [employee] expectations when they are job hunting,” Smoak said.
Still, Hewitt’s survey suggests even the threat of lawsuits against self-insured employers is causing businesses to at least think about their alternatives to offering an employer-sponsored plan.
An increasing number of employers are considering offering their employees a set amount of money to purchase their own health-care coverage.
While so-called defined-contribution plans haven’t made much of a dent in the Chicago market, employers are beginning to think about them. Hewitt said 22 percent of employers nationally and 16 percent of those in Chicago are considering such plans.
“The defined-contribution approach is likely to become more appealing to organizations as health-care costs continue to rise, legislation looms and consumer satisfaction declines,” said Jack Bruner, who heads Hewitt’s health management practice.
What’s the difference? So much for the effectiveness of all those health insurance company advertisements you see on television.
Despite spending millions of dollars trying to build brand identification, the nation’s insurers aren’t convincing employers there is much difference between health plans.
Hewitt’s study says most employers don’t see “strong differences between the leading health plans and delivery systems in their major locations.”
Indeed, “40 percent to 52 percent” of employers nationally see “no real difference” when comparing health plans for a wide array of services that include customer service, medical-care provider networks, cost efficiency and access.
In Chicago, however, employers appear to identify a bit more with the many different brands, although “36 percent to 44 percent” see no real differences among various health insurance services.
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