In 2014, the Patient Protection and Affordable Care Act (PPACA) will introduce significant changes to the commercial health insurance landscape. Rather than employer-sponsored insurance (ESI) offering the sole source for guaranteed issue insurance, coverage for preexisting conditions, and generally affordable coverage, many employees may have alternative sources of coverage through expansion of Medicaid eligibility or premium subsidies through the state or federal exchanges.

The sum of the changes and forces introduced by PPACA can be overwhelming and create significant uncertainty regarding future plan costs. The Milliman Healthcare Reform (HCR) Strategic Impact Study quantifies the cost impacts by HCR provision. The cost risks assessed include the 2018 excise tax on high-cost health plans (i.e., the “Cadillac plan” tax), potential in-migration of employees and dependents who currently waive coverage, potential adverse selection as a result of both in- and out-migration of participants, possible cost shifting from Medicare, Medicaid, and other employer plans, as well as new HCR penalties, fees, benefit mandates, and administrative requirements. The study also identifies available strategic opportunities under HCR specific to the health plan and recommends how to capitalize on them to maximize your employee benefit dollar.

This paper discusses key healthcare reform questions for employers that Milliman’s strategic impact study can help answer.