Employee benefits unchanged by new healthcare law, survey says

The early returns are in: Businesses and workers both say Massachusetts' new healthcare law mandating near-universal coverage hasn't caused companies to drop or dilute employee-sponsored health insurance.

Researchers writing in today's online edition of Health Affairs were watching for "crowd-out," or the effect state-subsidized insurance would have on whether businesses would continue to offer benefits on their own. The Massachusetts healthcare law, enacted in April 2006, included both a program to pay the bills for low-income residents and to assess an annual penalty of $295 per employee on businesses that decided not to offer insurance.

Results of a spring survey of Massachusetts companies show that 79 percent of businesses with three or more employees are offering insurance, up from 73 percent a year ago. Most employers think the new healthcare law is "good for Massachusetts." Fewer companies -- 29 percent this year compared to 36 percent last -- thought the healthcare law was a financial burden. Compared to employers nationally, Massachusetts companies are less likely to end coverage for their workers or limits who can receive benefits.

There were some complaints, though. Almost half of larger businesses were frustrated by paperwork they must file with the state identifying which workers decline health coverage or company plans allowing them to pay for health insurance with pretax dollars, often through payroll deduction.

"Massachusetts employers remain supportive of the reform plan and generally have fewer reservations than they did one year ago," the authors, led by Jon R. Gabel of the National Opinion Research Center at the University of Chicago, write. "For the moment, health reform has met or exceeded expectations with regard to the employer community."

Sharon Long and Paul Masi of the Urban Institute turned to employees for their views of the healthcare law's impact on their benefits. Surveys were conducted in the fall of 2006, before all components of the law were in force, and the fall of 2007, about a year after they were implemented.

According to workers, little changed from one year to the next. Overall, 90 percent of workers were covered in businesses of all sizes. The survey found no evidence that employers changed the scope of benefits, the network of providers, or the quality of care their employees could find through their health plans. Nor did workers say they had to pay a greater share of the cost of their benefits.

"Achieving near-universal coverage in the state will require the continued commitment of employers to provide access to high-quality health coverage," the authors write. "After on year of reform, the available evidence from the workers' perspective suggest that this support has thus far been realized."

The survey led by Gabel was funded by the Robert Wood Johnson Foundation and the Blue Cross Blue Shield of Massachusetts Foundation. The survey led by Long was supported by those two organizations and the Commonwealth Fund.