Will employers continue to provide health coverage to their employees? If not, what will employees do, and how will they balance increased costs alongside increased risks?
A pair of findings announced within days of each other in early June helped place in clear focus the dilemma currently seen in the benefits market as employers struggle to maintain affordable benefits for their employees.
First, consulting firm McKinsey & Company announced findings from a survey of more than 1,300 employers, suggesting that 30 percent of the respondents would "definitely" or "probably" stop offering employer-sponsored health insurance after 2014 because of "new economic and social incentives" embedded in Affordable Care Act health care reforms passed by Congress in 2010.
There was a political firestorm and debate over its methodology, and McKinsey subsequently clarified that the survey should not be used for "predictive" purposes. And to be fair, other studies have suggested the impact of the ACA will be far less seismic. For example, a recent Booz & Co.'s study takes a more detailed perspective, breaking the market down by size and suggesting that smaller employers are most likely to drop coverage. But the trend is still a real one, no matter the degree.
On the heels of that news, LIMRA posted 2011 worksite (voluntary) sales for the first quarter of 2011. While sales for worksite life products were down by 8 percent compared with the first quarter of 2010, sales for voluntary health products such as critical illness, dental and accident insurance were up 10 percent compared with the same period in 2010. Critical illness showed the most growth, with a 41 percent increase.
So, between the expected loss of major medical insurance and strong gains in voluntary plans, it is clear that employees are not only increasingly willing to accept their new role as purchaser, but are also acting with their wallets.
