Employers share more costs

By Caroline Chen

March 12, 2014 at 11:27 AM

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(Bloomberg) – One-third of large and midsize U.S. companies say they have raised deductibles or increased copays recently to save money, and another 48 percent are thinking about doing so, according to a survey of about 700 employers.

Mercer, a consulting firm, conducted the survey in January.

The firm found that 62 percent of the participating employers had concerns related to the so-called "Cadillac plan" tax on issuers of expensive plans.

The Patient Protection and Affordable Care Act (PPACA) calls for business with relatively generous health benefits to start paying the tax in 2018.

The provision calls for issuers of plans with benefits exceeding $10,200 for individuals and $27,500 for families to pay a tax of 40 percent of the value of the benefits.

Supporters of the tax say overly generous plans boost overall medical costs.

Almost one in five employers have already dropped plans that could be affected by the Cadillac plan tax, and another 33 percent are considering dropping the coverage, according to Mercer.

Employers are turning instead to private exchanges, or to plans that incorporate health savings accounts or health reimbursement arrangements.

About 8 percent of employers said they have dropped coverage for spouses who have other coverage available, and another 11 percent are considering doing so in 2015, Mercer said.

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