shrm health care reform poll

June 27, 2010

SHRM Poll: Organizations’ Response to Health

Care Reform

Organizations’ Response to Health Care Reform | ©SHRM 2010

Health Care Reform Series: Poll 1Introduction

Landmark legislation that brought about major reforms in health care coverage in

the United States was enacted in March 2010. The law affects employers and

HR professionals in a variety of ways. SHRM will be conducting a series of polls

on health care reform and the implications for employers and employees. The

findings from the first poll in this series, which was conducted in June 2010, are

included in this presentation.

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Key Findings

• Will Organizations Drop Health Care Coverage? Nearly one-half of organizations (46%) have

decided not to drop health care coverage for employees as a result of the new health care reform

law. Of these organizations, 34% made this decision without conducting an analysis to determine

whether to continue offering health care coverage or to drop coverage and pay opt-out fines. Twelve

percent did conduct such analysis and decided not to drop coverage. More than one-third of

organizations (37%) are still conducting or plan to conduct an analysis on the impact of health care

reform.

• Will Employees Pay More? Forty-one percent of organizations indicated that they are likely to pass

increased health care coverage costs to employees in 2011, regardless of whether these costs are

directly related to the new health care reform law.

• Alternative Health Care Plans on the Rise? Thirty-four percent of organizations are considering

alternative health care plans for employees as a result of the new health care reform law.

• The Impact of Dropping Health Care on Organizations. Regardless of whether it was

economically more sound, the primary reasons behind the organizations’ decisions not to drop

health care coverage were: 1) it would lower employee morale and job satisfaction, 2) it would make

organizations non-competitive in recruiting new employees, and 3) it would send the message that

the organization does not value the health of its employees.

• It Is Too Early to Tell: The primary reason organizations would be likely to drop health care

coverage and pay opt-out fines is if it would result in significant savings for the organization. Yet

50% of organizations indicated that they are unsure whether their organization would be dropping

health care coverage at this time, meaning it is simply too early to tell.

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16%

<1%

<1%

12%

15%

22%

34%

0% 10% 20% 30% 40%

Unsure at this time

Will not conduct an analysis and already decided to drop health care coverage

Already conducted an analysis and decided to drop health care coverage

Already conducted an analysis and decided not to drop health care coverage

Plan to conduct such an analysis

Currently conducting analysis

Will not conduct an analysis and already decided we will not drop health care coverage

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Is your organization engaging in an analysis to determine the impact of the new health care reform law on your health care plan?

Note: n = 813. Percentages do not total 100% due to rounding.



• Currently conducting analysis (by staff size): Larger organizations (those with 500 or more employees) were

more likely than organizations with fewer than 500 employees to report that they are currently conducting an analysis

on the impact of the health care reform on their health plans.

• Currently conducting analysis (by sector): Publicly owned for-profits (37%) were more likely than all other sectors

to report that they are currently conducting an analysis on the impact of the health care reform on their health plans.

Smaller percentages of privately owned for-profits (19%), nonprofits (15%) and government entities (14%) reported

conducting such analysis at this time.

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Comparison by Organization’s Staff Size and Sector

Smaller Organizations Larger Organizations Differences Based on

Organization Staff Size

•50 to 99 employees (2%)

•100 to 499 employees

(9%)

•500 to 2,499 employees

(23%)

•2,500 to 24,999

employees (36%)

•25,000 or more

employees (40%)

Larger organizations >

smaller organizations


• Will not conduct an analysis and already decided that organization will not drop health care coverage (by

staff size): Smaller organizations (those with fewer than 2,500 employees) were more likely than organizations with

2,500-24,999 employees to report that they will not conduct an analysis and have already decided that they will not

drop health care coverage.

• Will not conduct an analysis and already decided that organization will not drop health care coverage (by

sector): Privately owned for-profits (35%), nonprofits (38%) and government entities (50%) were more likely than

publicly owned for-profits (24%) to have not conducted an analysis and have already decided not to drop employee

health care coverage.

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Comparison by Organization’s Staff Size and Sector (continued)





(40%)


(40%)

•2,500 to 24,999

employees (25%)Smaller organizations >

larger organizations



Will your organization pass on to employees any increased or decreased health care coverage costs (e.g., premiums, co-pays, etc.) in 2011 that may be directly or indirectly related to the new health care reform law?

2%

10%

41%

23% 23%

15%

25%

30%

10%

20%

0%

10%

20%

30%

40%

50%

Highly unlikely Unlikely Likely Highly likely Unsure at this time

Increased costs (n = 814) Decreased costs (n = 813)

7

Note: Percentages may not total 100% due to rounding.


Is your organization considering alternative health care plans (e.g., less expensive coverage plans, health savings accounts, self-funding, etc.) as a result of the new health care reform law?

34%

30%

36%

0%

10%

20%

30%

40%

Yes No Unsure at this time

8

Note: n = 813.


Even though it may be an economically sound decision for your organization to drop health care coverage and pay the opt-out fine, what would be your organization’s primary reason for keeping health care coverage?

5%

7%

11%

26%

26%

28%

33%

41%

0% 10% 20% 30% 40% 50%

Other

Unsure at this time

N/A - Offering/keeping health care coverage is more economically sound for my organization

Dropping health care coverage would make us non-competitive in retaining top employees

Dropping health care coverage would significantly increase employee turnover at all levels of the organization

Dropping health care coverage would show that we do not value the health of our employees

Dropping health care coverage would make us non-competitive in recruiting new employees

Dropping health care coverage would lower employee morale and satisfaction

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Note: n = 819. Respondents were asked to select their two primary reasons.


Even though it may be an economically sound decision for your organization to drop health care coverage and pay the opt-out fine, what would be your organization’s primary reason for keeping health care coverage?

• Dropping health care coverage would lower employee morale and satisfaction (by staff size): Smaller

organizations (those with fewer than 2,500 employees) were more likely than organizations with 2,500 to 24,999

employees to report that dropping health care coverage would lower employee morale and satisfaction.

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Comparison by Organization’s Staff Size





(43%)


(46%)

•2,500 to 24,999

employees (27%)Smaller organizations >

larger organizations


If it were an economically sound decision and your organization would be likely to drop health care coverage and pay the opt-out fine, what would be your organization’s primary reason for doing so?

5%

50%

10%

9%

9%

14%

32%

0% 10% 20% 30% 40% 50% 60%

Other

Unsure at this time

Not applicable; Would not drop health care coverage

Dropping health care coverage would ultimately lower employees’ total contributions to their health coverage

Dropping health care coverage would encourage employees to take more responsibility for making sound

health care decisions

Dropping health care coverage and providing an equal amount of compensation to employees to replace the loss

would be viewed positively by employees

Dropping health care coverage would save the organization substantial amount of money

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Note: n = 819. Respondents were asked to select their two primary reasons.


Demographics: Organization Industry

IndustryManufacturing—other 14%

Health care, social assistance (e.g., nursing homes, EAP providers) 12%

Financial services (e.g., banking) 7%

Government/public administration—federal, state/local, tribal 7%

Services—professional, scientific, technical, legal, engineering 7%

Retail/wholesale trade 6%

Educational services/education 5%

Insurance 5%

Construction, mining, oil and gas 3%

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Demographics: Organization Industry (continued)

IndustryHigh-tech 3%

Other services (e.g., nonprofit, church/religious organizations) 3%

Utilities 3%

Consulting 2%

Services—accommodation, food and drinking places 2%

Telecommunications 2%

Transportation, warehousing (e.g., distribution) 2%

Arts, entertainment, recreation 1%

Biotech 1%

Manufacturing—auto/auto-related 1%

Publishing, broadcasting, other media 1%

Real estate, rental, leasing 1%

Association—professional/trade 1%

Pharmaceutical 1%

Other 9%

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Demographics: Organization Sector

5%

8%

19%

24%

44%

0% 10% 20% 30% 40% 50% 60%

Other

Government sector

Nonprofit organization

Publicly owned for-profit organization

Privately owned for-profit organization

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Note: n = 794


Demographics: Organization Staff Size

9%

28%

32%

25%

6%

0%

10%

20%

30%

40%

50%

50 to 99 employees 100 to 499 employees 500 to 2499 employees

2500 to 24999 employees

25000 or more employees

15

Note: n = 688


Demographics: Other

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Note: n = 813

U.S.-based operations 74%

Multinational operations 26%

Single-unit company:

Companies in which the

location and the company

are one and the same.

28%

Multi-unit company:

Companies that have more

than one location.

72%

Multi-unit headquarters determines

HR policies and practices

60%

Each work location determines HR

policies and practices

2%

A combination of both the work

location and the multi-unit

headquarters determine HR

policies and practices

38%

Is organization a single-unit company or a multi-

unit company?

Are HR policies and practices determined by

the multi-unit corporate headquarters, by each

work location or both?

Does organization have U.S.-based

operations (business units) only or

does it operate multinationally?

Note: n = 803

Note: n = 603

• 20% of organizations indicated that

employees at their work location were

unionized.

Note: n = 791


SHRM Poll: Organizations’ Response to Health Care Reform

• Response rate = 15%

• Sample comprised of 819 randomly selected HR professionals with the job title of manager and above, as well as HR professionals in the compensation and benefits functional area. All analyses were based on respondents working at organizations with a staff size of 50 employees or more.

• Margin of error is +/- 3%

• Survey fielded June 16–June 23, 2010

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Methodology

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