Employers Assertively Address Healthcare Reform In 2014 Benefit Plan Changes Overview As more healthcare reform measures fall into place and additional ones become active on 1/1/2014, employers are making significant changes to their healthcare benefit plans. In the past, many employers took focused, selective measures to flatten inevitable annual cost increases. Higher copays, changing to coinsurance, more prior authorizations/referral requirements and higher deductibles were the typical measures; the most drastic ones would be discontinuing a plan replacing it with another. Employers are choosing much more assertive measures to reduce their exposure to increased healthcare costs and reduce their involvement with managing benefit programs for their employees and their dependents. Learn more about healthcare reform and the healthcare industry at: www.healthcaremedicalpharmaceuticaldirectory.com www.healthcaremedicalpharmaceuticaldirectory.com John G. Baresky https://www.linkedin.com/in/johngbaresky #baresky

1. Employers Assertively Address Healthcare Reform In 2014 Benefit Plan Changes
Overview
As more healthcare reform measures fall into place and additional ones become active on 1/1/2014,
employers are making significant changes to their healthcare benefit plans. In the past, many
employers took focused, selective measures to flatten inevitable annual cost increases. Higher
copays, changing to coinsurance, more prior authorizations/referral requirements and higher
deductibles were the typical measures; the most drastic ones would be discontinuing a plan replacing
it with another. Employers are choosing much more assertive measures to reduce their exposure to
increased healthcare costs and reduce their involvement with managing benefit programs for their
employees and their dependents.
It costs money for companies to manage the benefit programs of their employees. By shifting
employees and retirees to private or government health insurance exchanges, they offload some of
the administrative burden to insurers and managed care plans. Through dropping coverage for part-
time workers and for spouses/partners who can get insurance through their own employers, they
reduce the administrative and financial responsibilities for their company.
As healthcare costs continue to rise, companies are seeking ways to better control how much more
they will pay each year for the coverage of their employees. By assigning a fixed amount of funding
for each employee to use in an exchange (a defined contribution arrangement), they shift more of the
risk to insurers and managed care plans. By shifting from defined benefit plans (coverage chosen by
the company at a defined premium cost), it also helps them avoid the upcoming excise tax on
benefits.
Examples of 2014 benefit plan changes by U.S. corporations:
Home Depot
Hardware/home improvement retailer will no longer offer medical benefits to part-time employees.
They are directed to obtain health insurance from state government-based health insurance
exchanges.
IBM
Global IT company is moving 110,000 Medicare-eligible retirees to Towers Watson Extend Health, a
private Medicare health insurance exchange. Beneficiaries will be directed to choose plan coverages
on their own.
Time Warner
Media company is discontinuing its direct healthcare benefit insurance for its retirees. They will be
assigned a fixed amount of funding and directed to a private healthcare exchange to choose their
own coverage.

2. Trader Joe's
Grocer will no longer offer health benefits for part-time workers. They will receive a $500 stipend and
directed to obtain health coverage through state-government based health insurance exchanges.
UPS
Global shipping giant will no longer cover spouses/partners of non-union employees who can access
healthcare coverage through their own employer. Company will continue to cover eligible
dependents of non-union employees. Coverage of union employees and their dependents (including
spouses/partners) continues.
Walgreen Co.
Chain drugstore will provide an allowance to eligible employees to purchase health insurance through
a private insurance exchange operated by AON. About 160,000 employees will be affected.
Impact
Employee/retiree beneficiaries will be directly affected in several ways:
If their coverage is discontinued, they will be paying more in out-of-pocket costs as they will have to
go to state-run insurance exchanges for coverage. Healthcare reform mandates individuals must buy
health insurance or pay a penalty.
Persons will be much more economically minded when they must choose their own insurance. They
may settle for less coverage, higher deductibles or even forgoing treatment to avoid spending more
money.
Employees will closely consider overall benefit offerings when deciding whether to stay with their
present employer or go to another company. Individuals will evaluate the true monetary value of
benefit plans and tie them more closely to their total compensation.
When planning for retirement, employees will more carefully consider when they can actually afford to
leave the workforce. They may reluctantly stay with their employer longer and conceivably cost the
employer more in benefits over the long run if they decide to remain in the workforce to accrue more
savings prior to retiring.
The United States is currently at the front-end of healthcare reform. Many more measures will fall
into place over the coming years. Employees, retirees and employers will have a lot to think about
and act upon during this time. While medical and financial considerations are currently at the
forefront for them, they will be paying further attention to healthcare reform in their decisions during
future elections. The pluses and minuses of healthcare reform will be closely weighed and acted
upon at the polls.
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