U.S. Employers Will Pass Along Health Reform’s Added Costs

U.S. employers say they will not absorb any additional costs that result from health care reform and plan to reduce benefits, raise prices for customers and cut head count to accomplish this financial goal, according to a survey of HR and benefit executives from mid-size and large U.S. organizations conducted by professional services firm Towers Perrin. The firm’s Health Care Reform Pulse Survey report, released in September 2009, analyzed responses collected two months prior.

“The way employers would respond to reform proposals that raise or lower their costs is one of our most telling findings—one that could conceivably impact economic recovery,” says Dave Guilmette, managing director of the Towers Perrin health and welfare practice. “With companies struggling to manage rapidly escalating health care costs and reclaim profits, only 11 percent of companies would agree to absorb increased health care costs by reducing their profits. The overwhelming majority of companies would respond to higher costs by reducing the benefits their employees receive.”