ROSELAND, N.J., March 5, 2013 /PRNewswire/ -- ADP ®, a leading
provider of employee health care benefits administration and
human capital management (HCM) services, today announced the
findings of a new ADP Research Institutesm study
indicating that if 2012 health benefit participation rate patterns
persist into next year, then a portion of newly eligible employees
may opt to remain uninsured because they perceive the cost of
insurance is too significant a percentage of their annual
income.
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ADP's "Planning for Health Care Reform: How Income Impacts
Employee Health Benefits Participation," is a companion study
to the previously published "ADP's 2012 Study of Large
Employer Health Benefits" and is based on actual,
real-world data for approximately one million employees and more
than two million covered lives. The new study provides a
comprehensive examination of the impact of income on employee
health benefits participation.
With data showing how employee income and health benefit plan
participation are closely intertwined, the study details the
potential impact and ramifications of the Affordable Care Act (ACA)
on employers who will need to comply with new mandates beginning in
2014.
Specifically, the ADP Research Institute study findings show
that employees with W-2 wages greater than 400% of the Federal
Poverty Level (FPL), or roughly $45,000 for a single individual under 2012
guidelines, consistently participate in health coverage at a rate
of 81%. However, as income declines below 400% of the FPL,
health plan participation rates decline sharply to just 37% for
single employees earning between $15,000 and
$20,000 per year.
"While no one can predict the future, the ADP Research Institute
findings suggest that lower income employees may avoid
participation in a health plan that consumes a significant
percentage of their income," said Tim
Clifford, president of ADP Benefits Administration
Services. "Clearly, employer to employee communications will
be essential in explaining the options moving forward."
Other key findings of the ADP Research Institute study
include:
- Across the entire study population, approximately 8.6% of
single, full-time employees pay 9.5% or more of their W-2 earnings
to obtain health coverage. However, among a certain subset of
employers, nearly one out of every four employees spent more than
9.5% of their wages on health coverage. According to the ACA,
beginning in 2014, employers may begin paying an annual penalty of
$3,000 (calculated monthly) for every
employee for which the premium for self-only coverage exceeds 9.5%
of their wages (with respect to each full-time employee who
receives a federal premium credit for public exchange coverage,
assuming the employer offers health insurance coverage to at least
95% of full-time employees).
- Employees earning $22,340 or more
per year (200% of the FPL for a single wage earner) may still be
better off obtaining coverage through their employer's group health
plan, despite affordability issues, rather than participating in a
public health exchange with government-provided subsidies.
"While many project that the impact of the ACA will be most
significant upon small businesses, certain industries, such as
retail, hospitality, construction and business services, could face
a dramatic increase in the number of employees that are newly
eligible for health benefits," notes Clifford. "In some
cases, employers could face a sharp increase in the number of
covered employees and subsequent costs, and if they choose to stop
offering employer-sponsored benefits, they may face a significant
tax penalty."
"How employers choose to comply with ACA requirements can have a
very significant impact upon multiple aspects of their business and
their human capital management strategy," Clifford adds.
"While increases in total health care benefit plan costs and
potential penalties can have a direct impact upon revenue,
employers also need to consider the full business implications of
their benefits decisions, as they can affect employee compensation,
company reputation, and recruitment and retention."
To request a free copy of ADP's "Planning for Health Care
Reform: How Income Impacts Employee Health Benefits
Participation" study, and access a video as well as related
infographics and articles, please click here or visit
http://www.adp.com/healthbenefits.
Upcoming Webinar
On March 28,
2013, Chris Ryan, ADP Vice
President of Strategic Advisory Services, will conduct an in-depth
webinar focused on Health Care Reform and share research findings
to help employers examine the benefit purchasing habits of newly
eligible employees under the ACA. Entitled: Health Care Reform: How
Income Impacts Participation in Employee Health Benefits, the
webcast will be available at 11:00 a.m. ET
on Thursday, March 28. To register and attend, please
visit http://www.hr.com/stories/1362424920044.
About the ADP Research Institute
The ADP Research
Institute provides insights to leaders in both the private and
public sectors around issues in human capital management,
employment trends, and workforce strategy.
About ADP
ADP, Inc. (NASDAQ: ADP), with more than
$10 billion in revenues and
approximately 600,000 clients, is one of the world's largest
providers of business outsourcing and human capital management
solutions. Leveraging over 60 years of experience and a global
footprint spanning more than 40 countries, ADP offers a wide range
of human resource, payroll, talent management,
tax and benefits administration solutions from a
single source, and helps clients comply with regulatory and
legislative changes, such as the Affordable Care Act. ADP's
easy-to-use solutions for employers provide superior value to
companies of all types and sizes. ADP is also a leading provider of
integrated computing solutions to auto, truck, motorcycle,
marine, recreational vehicle, and heavy equipment
dealers throughout the world. For more information about ADP
or to contact a local ADP sales office, reach us at 1.800.225.5237
or visit the company's Web site at www.adp.com.
Contact:
Jim Larkin
ADP
(973) 407-9714
jim.larkin@adp.com
SOURCE ADP