Monday, October 28, 2013

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Monday, October 7, 2013

Unintended Consequences of The ACA

While the folks in Washington place chicken with the ACA, it appears parts of the act may stay no matter what changes are implemented; The ability of people to buy individual and family plans that grant full coverage despite pre-existing conditions seems likely to be one part that will stay.

What does this mean for employers? If you use your group health plan as the major incentive for people to work at and stay with your organization, you may need to rethink your engagement and employee satisfaction strategy.

Our prediction is that voluntary turnover will increase as a result of the new system. Group health plans will not be the golden handcuffs they once were as the ACA will most likely serve as life long COBRA. With subsidies set at fairly high levels, the risk to go it alone through self-employment may be perceived as lower.

As we have noted elsewhere on this blog, quantitative incentives overall are losing their ability to create employee loyalty in our knowledge based economy. With the ACA exchanges and insurance providers already providing pricing comparisons and the coverage only three months way from implementation, employers may lose the hybrid qualitative/quantitative incentive of group health plans.

The answer; Create a purpose based organizational culture with more opportunities for professional development and continuing education. We have posted evidence elsewhere on this BLOG that financial results improve when organizations take this approach. With the ACA in place, we envision culture playing an even more important role in creating loyal and highly productive employees.