Study: Hospitality Industry Expects Costs To Rise with HealthCare Reform
A recent study conducted by Mercer L.L.C., a global leader for HR and related financial advice, products and services, indicates that employers in the hospitality industry (in addition to the retail sector) believe they will face the greatest cost increases when provisions of the health care reform law in 2014 impose financial penalties on those who are in violation.
In fact, 40% of those in the hospitality industry (based on a survey of 1,203 employers) are expecting to see a rise of at least three percent when health care reform requirements kick in as of 2014. It is then that employers must provide qualified coverage to full-time employees working 30 hours a week. Employers who don’t will be hit with a $2,000 assessment per employee.
Additionally, some employers will also face increases if their mini-med plans do not meet 2014 standards. Those who offer mini-med plans and other limited health care plans that set an annual dollar limit on essential benefits that do not meet the new federal limits run the risk of being fined. The minimum limit for 2012 is $1.25 million, for 2013 limit it’s $2 million. Beginning in 2014, annual limits for essential benefits will not be permitted. Between the mandate to provide qualified coverage for all full-time employees and eliminating annual benefit limits, employers in the hospitality sector could be hit twice with penalties.
Many in the hospitality industry acknowledge that they will have to alter their existing health plans to meet the requirements for those working at least 30 hours per week. This can be a significant expense for employers, but at the same time, the survey indicated that these same employers wanted to remain competitive in the industry with their employee benefits packages, and a very low percentage plan to drop coverage altogether.
The hospitality industry is a key Risk Advisor of America niche, providing hoteliers with admitted and alternative markets for property/casualty coverages. As such, our goal is to keep you updated on all issues, trends, and changes that affect the hospitality sector. For more information about the programs and the portfolio of coverages we provide, please contact one our hospitality risk advisors at (407) 571-1320.