Employers are increasingly concerned with the high cost of health care and executives in the C-Suite are beginning to take notice. The Affordable Care Act (‘‘ACA’’) required employers who sponsor group health plans to adopt a number of reforms, many of which significantly increased the cost of offering group health plan coverage to employees, former employees and their dependents. Among these reforms were the extension of coverage to adult dependent children, elimination of life-time and annual limits on essential health benefits and the elimination of pre-existing condition exclusions. In addition, employers are now subject to a whole host of new tax and reporting requirements under the ACA, namely the employer shared responsibility mandate that requires large employers to offer minimum essential coverage to full-time employees or face a significant tax penalty. Even if an employer does provide coverage, penalties can also be triggered if the coverage is not affordable for full-time employees or does not provide minimum value. Most significantly, the tax on high cost health care—the socalled Cadillac Tax—which is scheduled to take effect in January of 2018 has caused employers of all sizes to assess their current health plan offerings and make modifications in attempts to escape the tax, or at a minimum, reduce the amount of excess coverage that would be subject to taxation.

One approach employers have been increasingly adopting as a way to foster preventive care and control health plan costs over the long term is the adoption of employer sponsored health clinics at the worksite. In fact, in a follow up to its National Survey of Employer-Sponsored Health Plans, Mercer found that 29% of employers with 5,000 or more employees provided an onsite or near-site clinic offering primary care services, up from 24% in the prior year. Improving access to quality care is also a reason cited by employers for adoption of on-site clinics; even though certain types of on-site clinics are included in calculation of the Cadillac Tax (see below under ACA Issues).

Originally published in Pension & Benefits Daily on September 30, 2015.