Beginning this year, the ACA requires larger employers to offer affordable health coverage to employees who work 30 hours or more per week or be subject to a fine. The ACA also imposes reporting requirements on companies related to the health coverage status of their workers.
And in 2018, the "Cadillac Tax" will go into effect, and impose a 40 percent, non-deductible excise tax on high-cost employer-provided health plans. In the first year, the threshold for the tax will be $10,200 for individual coverage and $27,500 for family coverage.
"The Affordable Care Act has led employers to fundamentally reconsider every element of workforce management and shift their focus toward what I like to call the three 'Cs' of cost, compliance and consumerism," said Gerry Leonard, president of ADP Benefits Services.
"Many companies today are exploring new models for administering health benefits to their employees and looking for innovative ways to reduce the costs of their health plans in order to avoid the Cadillac excise tax."
Will Giaconia, vice president of health care strategy at ADP, said that offering employees a range of plans, at different premium levels, can not only make those workers "become more value conscious" and apt to select "leaner plans," but it can also make them more satisfied with their coverage. That, in turn, can make it easier for companies to control their health plan costs and keep them under the Cadillac Tax threshold, he said.
Gianconia also said that although the number of employees in companies enrolled through private insurance exchange is still relatively small—more than 2.7 million in 2014—"we think they're here to stay." The consulting group McKinsey has said that private exchanges could be handling up to 20 percent of the employer-based health insurance market by 2019.