1. SHRM Poll: Organizations Response to Health Care
ReformOrganizations Short-Term Decisions September 17, 2010
2. Health Care Reform Series: Poll 2 Introduction 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 its
implications for employers and employees. This presentation covers
the findings from the second poll in this series, which was
conducted in July 2010. Organizations Response to Health Care
Reform Pending Short Term Decisions | SHRM 2010 2
3. Key Findings What is the impact of the grandfathered status
on organizations? 30% of HR professionals say they are attempting
to maintain their organizations grandfathered status, whereas 11%
have decided not to maintain their organizations grandfathered
status. Are organizations planning to implement wellness programs
in light of the health care reform law? Almost two-thirds (64%) of
organizations already implemented wellness programs, and 18% are
planning to implement them. What provisions in the new law are
organizations planning to implement before they become required by
law? About one-third of organizations reported that their plan
already meets legal requirement in the following areas: 1) removing
all preexisting condition exclusions for children under age 19, 2)
removing annual maximums, and 3) re-evaluating current retiree
medical plan. Organizations Response to Health Care Reform Pending
Short Term Decisions | SHRM 2010 3
4. Based on the new health care reform laws grandfathered
status, which one of the following statements best describes your
organizations position? We are or will be conducting analyses and
exploring different health care options to decide whether to keep
the grandfathered status 21% ^We will attempt to maintain
grandfathered status to avoid additional costs to the organization
and/or employees 21% We have not yet begun to consider the issues
around grandfathered status 17% Not sure what grandfathered status
means 10% ^We will attempt to maintain grandfathered status to
avoid having to comply with specific elements of the new law 9% We
do not qualify for grandfathered status 6% *We have already decided
not to maintain our grandfathered status as it will cost more to
keep it than to change health care plans 6% *We have already
decided not to maintain our grandfathered status because we want to
modify benefits to provide the additional benefits mandated under
5% non-grandfathereded plans Other 6% 0% 10% 20% 30% 30% of
organizations are attempting to maintain their grandfathered
status.^ 11% of organizations have decided not to maintain their
grandfathered status.* Note: n = 826. Percentages do not total 100%
due to rounding. Organizations Response to Health Care Reform
Pending Short Term Decisions | SHRM 2010 4
5. Based on the new health care reform laws grandfathered
status, which one of the following statements best describes your
organizations position? Comparison by Organizations Operations
Location, Union Status and Medical Benefit Funding We are or will
be conducting analyses and exploring different health care options
to decide whether to keep the grandfathered status (by union
status): Organizations with no employees under a collective
bargaining agreement (23%) were more likely than unionized
organizations (14%) to report that they are or will be conducting
analyses and exploring different health care options to decide
whether to keep the grandfathered status. We have not yet begun to
consider the issues around grandfathered status (by medical benefit
funding): Self-insured organizations (24%) were more likely than
insured organizations (11%) to report that they have not yet begun
to consider the issues around grandfathered status. Not sure what
grandfathered status means (by operations location): Organizations
with multinational operations (13%) were more likely than
U.S.-based (8%) organizations to report that they are not sure what
grandfathered status means. We will attempt to maintain
grandfathered status to avoid additional costs to the organization
and/or employees (by medical benefit funding): Self-insured
organizations (24%) were more likely than insured organizations
(17%) to report they will attempt to maintain grandfathered status
to avoid additional costs to the organization and/or employees. We
will attempt to maintain grandfathered status to avoid having to
comply with specific elements of the new law (by operations
location): Organizations with multinational operations (13%) were
more likely than U.S.-based organizations (8%) to report they will
attempt to maintain grandfathered status to avoid having to comply
with specific elements of the new law. Organizations Response to
Health Care Reform Pending Short Term Decisions | SHRM 2010 5
6. Are there provisions in the new health care reform law that
your organization is planning to implement before they become
required by law? Currently Implementing Not Offering and Before
Implementing Plan Already Required by Until Required Meets Legal
Law by Law Requirement Removing all preexisting condition
exclusions for children under age 19 36% 11% 53% Removing annual
maximums 30% 9% 61% Re-evaluating current retiree medical plan 27%
14% 58% Removing lifetime maximums 24% 11% 66% Extending coverage
to adult children up to age 26 regardless of status 22% 21% 57%
(student/married) Extending coverage to adult children up to age 26
regardless of the 20% 19% 61% availability of other coverage
Reducing the maximum health care flexible spending account (FSA) 8%
8% 83% employee contributions prior to 2013 Note: n = 209-705.
Percentages do not total 100% due to rounding. Not sure/not
applicable responses were excluded from this analysis.
Organizations Response to Health Care Reform Pending Short Term
Decisions | SHRM 2010 6
7. Are there provisions in the new health care reform law that
your organization is planning to implement before they become
required by law? Comparison of Provisions Organizations Are
Currently Offering by Organizations Staff Size Removing all
preexisting condition exclusions for children under age 19 (by
staff size): Larger organizations (those with 2,500 to 24,999
employees) were more likely than organizations with 500 to 2,499
employees to report that removing all preexisting condition
exclusions for children under age 19 is one of the provisions in
the new law that their organizations already offer. Smaller
Organizations Larger Organizations Differences Based on
Organization Staff Size 500 to 2,499 employees (29%) 2,500 to
24,999 employees Larger organizations > smaller (50%)
organizations Extending coverage to adult children up to age 26
regardless of status (student/married) (by staff size): Smaller
organizations (those with less than 500 employees) were more likely
than organizations with 500 to 2,499 employees to report that
extending coverage to adult children up to age 26 regardless of
status is one of the provisions in the new law that their
organizations already offer. Smaller Organizations Larger
Organizations Differences Based on Organization Staff Size 100 to
499 employees (30%) 500 to 2,499 employees (15%) Smaller
organizations > larger organizations Extending coverage to adult
children up to age 26 regardless of the availability of other
coverage (by staff size): Smaller organizations (those with less
than 500 employees) were more likely than organizations with 500 to
2,499 employees to report that extending coverage to adult children
up to age 26 regardless of the availability of other coverage is
one of the provisions in the new law that their organizations
already offer. Smaller Organizations Larger Organizations
Differences Based on Organization Staff Size 100 to 499 employees
(29%) 500 to 2,499 employees (13%) Smaller organizations >
larger organizations Organizations Response to Health Care Reform
Pending Short Term Decisions | SHRM 2010 7
8. Are there provisions in the new health care reform law that
your organization is planning to implement before they become
required by law? Comparison of Provisions Organizations Are
Currently Offering by Selected Organizational Demographics
Differences Based Differences Based Differences Based on
Organizations on Medical Benefit on Union Status Operations Funding
Location Insured (37%) > self- Removing annual maximums insured
(26%) Insured (34%) > self- Unionized (31%) > non- Removing
lifetime maximums insured (18%) unionized (22%) U.S.-based only
Extending coverage to adult children up to age 26 regardless of
organizations (24%) Insured (39%) > self- status
(student/married) > Multinational insured (10%) operations (15%)
Extending coverage to adult children up to age 26 regardless of the
Insured (35%) > self- availability of other coverage insured
(8%) Note: Blank cell indicates that there were no significant
differences in this category. Organizations Response to Health Care
Reform Pending Short Term Decisions | SHRM 2010 8
9. Are you planning to implement wellness programs in light of
the new health care reform law? Not planning to implement yet, 18%
Planning to implement, 18% Implemented, 64% Comparison by
Organizations Medical Benefit Funding: Self-insured organizations
(69%) were more likely than insured organizations (57%) to report
implementing wellness programs in light of the new health care law.
Note: n = 598. Not sure/not applicable responses were excluded from
this analysis. Organizations Response to Health Care Reform Pending
Short Term Decisions | SHRM 2010 9
10. How is your organizations primary medical benefit currently
funded? Insured, 44% Self-insured, 56% Note: n = 749 Organizations
Response to Health Care Reform Pending Short Term Decisions | SHRM
2010 10
11. How is your organizations primary medical benefit currently
funded? Comparison by Organizations Staff Size, Operations
Location, Sector and Union Status By staff size: Larger
organizations (those with 500 or more employees) were more likely
than organizations with fewer than 500 employees to report that
their organizations primary medical benefit is self-insured.
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size 100 to 499 employees (39%) 500 to 2,499
employees (69%) Larger organizations > smaller 2,500 to 24,999
employees organizations (84%) 25,000 or more employees (84%) By
operations location: Organizations with multinational operations
(71%) were more likely than U.S.-based only (51%) organizations to
report that their organizations primary medical benefit is
self-insured. By sector: Publicly owned for-profits (72%) were more
likely than privately owned for-profits (50%) and nonprofits (49%)
to report that their organizations primary medical benefit is
self-insured. By union status: Unionized organizations (64%) were
more likely than non-unionized (54%) organizations to report that
their organizations primary medical benefit is self-insured.
Organizations Response to Health Care Reform Pending Short Term
Decisions | SHRM 2010 11
12. Demographics: Organization Industry Industry Manufacturing
other 18% Health care, social assistance (e.g., hospitals, clinics)
13% Financial services (e.g., banking) 8% Services professional,
scientific, technical, legal 7% Educational services/education 6%
Government/public administrationfederal, state/local, tribal 5% 5%
Retail/wholesale trade Construction, mining, oil and gas 4% 4%
Insurance Note: n = 754. Percentages do not total 100% due to
rounding. Organizations Response to Health Care Reform Pending
Short Term Decisions | SHRM 2010 12
13. Demographics: Organization Industry (continued) Industry
Other services (e.g., other nonprofit, church/religious
organizations) 4% Transportation, warehousing (e.g., distribution)
3% High-tech 3% Servicesaccommodation, food and drinking places 3%
Utilities 2% Real estate, rental, leasing 2% Publishing,
broadcasting, other media 2% Manufacturingauto/auto-related 2%
Arts, entertainment, recreation 1% Consulting 1% Telecommunications
1% Associationprofessional/trade 0% Pharmaceutical 0% Biotech 0%
Other 5% Note: n = 754. Percentages do not total 100% due to
rounding. Organizations Response to Health Care Reform Pending
Short Term Decisions | SHRM 2010 13
14. Demographics: Organization Sector Privately owned
for-profit organization 47% Publicly owned for-profit organization
21% Nonprofit organization 20% Government sector 8% Other 4% 0% 10%
20% 30% 40% 50% 60% Note: n = 756 Organizations Response to Health
Care Reform Pending Short Term Decisions | SHRM 2010 14
15. Demographics: Organization Staff Size 50% 40% 35% 30% 27%
26% 20% 10% 6% 5% 0% 50 to 99 employees 100 to 499 employees 500 to
2499 employees 2500 to 24999 25000 or more employees employees
Note: n = 497. Percentages do not total 100% due to rounding.
Organizations Response to Health Care Reform Pending Short Term
Decisions | SHRM 2010 15
16. Demographics: Other Does the organization have U.S.-based
Is organization a single-unit company or a multi- operations
(business units) only or unit company? does it operate
multinationally? Single-unit company: A 29% company in which the
U.S.-based operations 75% location and the company are one and the
same Multinational operations 25% Multi-unit company: A 71% company
that has more than Note: n = 750 one location Note: n = 763 19% of
organizations indicated that Are HR policies and practices
determined by employees at their work location were the multi-unit
corporate headquarters, by each unionized. work location or both?
Note: n = 755 Multi-unit headquarters determines 64% HR policies
and practices Each work location determines HR 1% policies and
practices A combination of both the work 35% location and the
multi-unit headquarters determine HR policies and practices Note: n
= 556 Organizations Response to Health Care Reform Pending Short
Term Decisions | SHRM 2010 16
17. SHRM Poll: Organizations Response to Health Care Reform
Poll 2 Methodology Response rate = 21% Sample comprised of 1,095
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 July 22August 3, 2010 For
more poll findings, visit: www.shrm.org/surveys Follow us on
Twitter: http://twitter.com/SHRM_Research Organizations Response to
Health Care Reform Pending Short Term Decisions | SHRM 2010 17