While it may be changing shape along the way, healthcare reform will continue moving forward — and this means significant impact on employers sponsoring health plans. Healthcare reform is clearly an important issue that moves beyond Human Resource departments. A recent survey conducted by Gallagher Benefit Services, Inc. of nearly 50 Washington State employers from a variety of industries with an average of 100-500 employees found 88 percent of respondents holding strategic discussions on the management and/or board level regarding how to prepare for healthcare reform.

Cost is certainly a driving factor for this overwhelming involvement at the executive level. With all health plans required to initiate at least some changes this year (including covering dependent children to age 26 and removing annual dollar limits on certain benefits), 29 percent of companies surveyed reported moderate (1 percent to 3 percent) cost increases simply to comply with these new mandates, with an additional 20 percent of respondents reporting significant (more than 3 percent) increases.

Employers can avoid some of the healthcare reform mandates at this time by maintaining “grandfather” status. Employers wishing to keep their grandfathered status, however, may only make very limited changes to their benefit plans, as well as keep detailed records to prove they still meet the grandfathered requirements. It was anticipated that most employers would chose to lose their grandfathered status to allow greater flexibility for future plan changes, and the survey indicates this to be true, with only 17 percent of companies actively keeping grandfathered status.

While healthcare reform requires attention and strategic discussions at the top levels, it is also very clear that communication with employees is a priority. When asked if they have communicated the anticipated impact of healthcare reform to their employees, 77 percent of respondents replied they had, or are planning to within the next six months. The methods of communication varied, with open enrollment materials, staff meetings, and newsletters reported as the most popular. Whatever the way, it is clear that strong employee communications are essential as healthcare reform continues to take effect.

More information on the impact of healthcare reform on businesses is available from Gallagher Benefit Services online at www.gallagherbenefits.com/HCReform/QA.