Employer Sponsored Coverage

Manufacturers seek flexible health care options to reduce costs


Health care spending continues to be one of the top issues for manufacturers and small businesses. Insurance premiums have risen for many firms, and provisions of the Affordable Care Act (ACA) have exacerbated such increases for some businesses, particularly small and medium-sized entities. Despite such frustrations with pricing pressures, manufacturers see the benefits of offering health care options to their employees. In the most recent survey from the Kaiser Family Foundation, 92 percent of workers in the sector were eligible to participate in their company’s health benefits, the highest of any industry.1 Of those individuals who were eligible, the take-up rate was 83 percent.

With that in mind, manufacturers continue to seek flexible health care options to reduce their costs. Manufacturing businesses recognize that providing health care coverage is a necessity for them to remain competitive in attracting talent and maintaining a healthy, stable workforce. For example, when asked about how they might react to increasing costs for offering health care in a recent National Association of Manufacturers (NAM) survey, only 1.6 percent planned to stop providing coverage.2 Instead, manufacturers have been forced to switch plans in some cases and/or increase copays and deductibles as well as raise the share of premiums paid by employees to keep costs down.

This paper focuses on recent trends regarding health care costs and highlights a number of policy priorities for manufacturers, including their desire to lower costs, increase the overall number of options available and ensure they and their employees are well informed when making important health care decisions.

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