Fortune 500 Companies Shifting Health Insurance Costs to Employees

To offset the increasing costs of health insurance accompanying the implementation of the Affordable Care Act (ACA), many Fortune 500 companies are shifting the responsibility to employees, according to a recent survey of chief human resource officers (CHROs).

The annual HR@Moore Survey of Chief HR Officers Survey, conducted by the Darla Moore School of Business at the University of South Carolina, aimed to gain insight on the role of the CHRO. This year’s survey, which was conducted in May 2014 and June 2014, looked at the effects of the ACA on employment strategies and decisions.

Of the 213 CHROs who completed the survey, 63% indicated they had not noticed any changes in the quality of health care, and 65% said they had not seen any changes in the quality of its delivery. In addition, 58% said they observed no change in the transparency of health care, while 56% indicated that they had not seen a change in health care innovation.

“It's still early in its implementation,” said Paul Wright, the director of the survey, in a university press release. “It may take a few years before we see those impacts come through the health care system."

Although most CHROs reported that they had not seen changes in the delivery of health care, 78% said the ACA had an immediate impact on their health insurance costs. On average, survey respondents indicated that those costs had increased by 7.73%, but only 37% of CHROs reported increases in total labor costs.

“The results suggest that employers have shifted some of the costs and the risks of health insurance to employees,” the report noted. In a second section of the survey, 56% of CHROs said they had moved their employees to consumer-directed health plans, and an additional 17% planned to do so. In addition, 52% reported that they had raised employee contributions toward health insurance, with another 19% indicating plans to do so.

Overall, 73% of respondents said their companies now offer consumer-directed health care plans, compared with just 13% in a 2008 study conducted by the Kaiser Family Foundation and Atlanta Business Chronicle.

The report also revealed that 29.7% of the companies surveyed had taken or planned to take action to encourage part-time employment or limit the use of full-time employees.

“While [the ACA] certainly increased [health care] access, and the impact on quality has yet to be determined, these results suggest that it has increased costs, and that those cost increases are being borne by the individuals that already had health insurance through their employers,” the report concluded.