Rising Health Care Costs Remain a Top Concern to Manufacturers
November 1, 2016
The rising cost of health care is on the minds of employers across the country, and the manufacturing industry is no exception. As manufacturers seek options to reduce costs, they are feeling uncertain about what the future holds, especially in light of the upcoming election and recently released news from the White House about pending increases.
While a third quarter 2016 National Association of Manufacturers (NAM) Outlook Survey reveals that 61% of respondents are feeling positive about their company’s outlook, that optimism unfortunately does not represent their views when it comes to health care costs. Of the manufacturers surveyed, 8.5% expect their health insurance costs to increase 8.5% over the next 12 months, up from 8.3% in June. In fact, nearly three-quarters (74.8%) of survey respondents cited rising health care costs as their greatest business challenge:
According to the Kaiser Family Foundation, in 2014 the average annual cost of a health insurance plan for manufacturing employees was $16,528. According to NAM, that amount had already increased to $17,845 for the average plan in 2015.
Election Year Jitters
Regardless of who wins the election, there clearly will be changes to the ACA – now in its sixth year – and this uncertainty is contributing to employer and employee concern. While both candidates favor change, their vision for change differs widely. Though there is bipartisan support in Congress to eliminate certain ACA provisions, such as the “Cadillac” tax – an expensive employee benefits tax – it would be difficult to get Congress to replace the ACA outright. What is keeping business executives up at night is not knowing which substantial changes will be made.
Manufacturers will need to be aware of regulations to remain compliant with the ACA and avoid future penalties. Smith & Howard’s manufacturing team will continue to closely monitor health care costs and other issues of importance to the manufacturing industry.
Stay tuned for more information on the ACA and other matters affecting manufacturers after the election.
If you have any questions and would like to connect with a team member please call 404-874-6244 or contact an advisor below.CONTACT AN ADVISOR
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