KANSAS CITY, Mo., June 7, 2011 /PRNewswire/ -- The health reform law's adverse cost impact on employers is significant, foreshadowing intentions by many employers to curtail benefits or even exit the group health insurance marketplace, insurance leader Lockton told Congressional leaders. Testifying June 2 before the House Energy and Commerce Committee's Subcommittee on Health, Edward Fensholt, director of Lockton's Health Reform Advisory Practice, told committee members that the hard costs—and hassle costs—paid by employers in implementing the law are substantial, and not something to be trivialized.
"When we were asked to testify before this House Subcommittee," Fensholt said, "we knew we had to make the point our clients have been making for months: they are concerned about the cost implications of the federal health reform law. Our clients are very, very apprehensive about the mandates. We want Congress to know: U.S. jobs are at stake here as employers wrestle with the true cost of health reform to their businesses."
Lockton provides, through its employee benefits division, consulting services to more than 2,500 clients of all sizes. The company represents industries as diverse as hospitals to hospitality, but Fensholt says that according to a survey of its clients Lockton concluded last month, the concern about the financial implications of the reform effort span all industry segments.
Fensholt told the Subcommittee that according to Lockton's May 2011 Health Reform Survey, to which a substantial portion of Lockton's clients responded, 80 percent of respondents are concerned or very concerned about the cost implications of the reform law's administrative obligations on plan sponsors. Additionally, 71 percent said they were concerned or very concerned about the financial implications of the law's"play or pay" mandate on employers in 2014, and at least 6 out of 10 respondents said they were concerned or very concerned, as well, about the cost impacts of the immediate benefit mandates in the bill, and the automatic enrollment requirement that will take effect in 2014.
"In assessing the impact of health reform legislation," Fensholt told the Subcommittee on Health last week, "we urge you to place yourselves not only in the shoes of those Americans who need access to affordable insurance, but in the shoes of the employers who supply valued coverage to 160 million of us. Employers are burdened and frustrated by aspects of the health reform law that add costs and complexity to their health plans, and it may lead some of them to eliminate group coverage and full-time jobs."
Click to review Fensholt's written testimony, provided in advance to the House Subcommittee.