How health care reform is changing the dynamic between employers and employees.
The Affordable Care Act is changing how health care works in the United States—and that means the relationship between employers and employees could be shifting, too.

After all, health insurance is one of the most popular benefits that businesses use to recruit, compensate and retain workers. As the ACA’s new rules take effect, many companies are rethinking how their health plans should be structured.The ACA’s effect on businesses varies by size. It’s typically broken down into two categories: midsized to large businesses with 50 or more employees and small shops with fewer than 50 employees.

Midsized to Large Businesses

Companies with more employees than a small Midwestern town often look at their employees’ health insurance as a financial tool. Employers know that identifying, mitigating and managing employees’ risk can have a positive effect on workforce morale and the company’s financial bottom line.An increased emphasis on employee wellness is one popular way these larger groups are battling increased health insurance costs. The healthier their employees are, the fewer sick leave days they have to take and health insurance dollars they have to use. Employers are starting to get creative with this strategy. Some use phone applications to track employees’ fitness goals and reward them with cash-in-hand for their achievements. Others use C-level executive wellness pledges to set an example for the rest of their workforce.

Other employers are introducing new voluntary benefits to employees. In the past, workers could often sign up for dental and vision coverage at reduced rates. Some companies are expanding that to include home, car and even pet insurance. The goal is to reduce other costs for employees to offset potential increases in employee health insurance contributions.

Small Businesses

Many small business owners are looking at the ACA changes through a different lens. In the past, companies consisting of young, healthy employees were some of the least expensive to insure. Because of the ACA’s effort to balance health insurance costs among the U.S. population, insurance carriers will no longer be able to take into account the current health or pre-existing costs of an employee population. Therefore, small businesses with young, healthy employees will be rated differently in the future.

Small shops are taking note of these changes. Some are starting defined contribution strategies where they give employees a set dollar amount to spend on health insurance throughout the year. A select few are shifting the money they used to spend on employee benefits directly to the employees’ paychecks so they can shop for insurance on their
own through government or private
insurance marketplaces.

These are just a few of the compensation strategies that businesses are using to mitigate costs while keeping their employees satisfied.

Change always brings new opportunity. The effects of the ACA will undoubtedly bring that. The key is to make sure your health insurance decisions are long-term factors in the forever important employee-employer relationship.