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Post Date:  9/8/2014
Last Updated:  9/8/2014

Summary
Cross References
- www.newyorkfed.org/survey/business_leaders/2014/2014_08Supplemental.pdf

A recent survey of manufacturing and business leaders conducted by the Federal Reserve Bank of New York indicates that the median percentage change in health coverage costs in 2014 is 10% for manufacturing firms and 9% for service firms. When asked for a qualitative assessment of the Health Care Reform Act’s net effect on health benefit costs per worker, 20% of service firms and 35% of manufacturers reported that it had increased costs "a lot" this year. 38% of both service firms and manufacturers reported that it had increased costs "a little" this year, with most of the rest reporting no effect. About 5% reported a small reduction in their health coverage costs. For 2015, half of the manufacturing respondents and a third of the service sector said that they expected health benefit costs to increase considerably.

When asked whether they were changing their health plans in response to the Health Care Reform Act, 36% of manufacturers and 41% of service firms said they were not. For those that were planning a change, however, the most widely reported adjustments involved higher deductibles, increased co-pays, higher out-of-pocket maximums, and an increased employee contribution to the premium. The vast majority of firms in both surveys indicated that they would be paying a higher total premium, though a sizable proportion of those were passing a portion of the increase along in the form of a higher employee contribution to the premium.

Respondents in both surveys reported that a somewhat larger proportion of employees would be covered than in the past. About 20% in both surveys said that they were reducing the number of workers and/or raising the share of part-time workers. A similar proportion said they were paying less compensation per worker because of the Health Care Reform Act, and a similar proportion of manufacturers said they were outsourcing more work.

The most widely cited change among those listed in the questionnaire was raising the prices charged to customers. 36% of manufacturers and 25% of service firms said they were hiking prices in response to effects of the Health Care Reform Act.

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