ADP Research Institute Study: Employee Income is a Determining Factor in Health Benefits Participation

   ADP Research Institute Study: Employee Income is a Determining Factor in
                        Health Benefits Participation

If Current Patterns for Participation Rates Based on Income Persist in 2014, a
Significant Portion of Newly Eligible Employees May Opt to Remain Uninsured

PR Newswire

ROSELAND, N.J., March 5, 2013

ROSELAND, N.J., March 5, 2013 /PRNewswire/ -- ADP ®, a leading provider of
employee health care benefits administration and human capital management
(HCM) services, today announced the findings of a new ADP Research
Institute^sm study indicating that if 2012 health benefit participation rate
patterns persist into next year, then a portion of newly eligible employees
may opt to remain uninsured because they perceive the cost of insurance is too
significant a percentage of their annual income.

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ADP's "Planning for Health Care Reform: How Income Impacts Employee Health
Benefits Participation," is a companion study to the previously published
"ADP's 2012 Study of Large Employer Health Benefits"  and is based on actual,
real-world data for approximately one million employees and more than two
million covered lives. The new study provides a comprehensive examination of
the impact of income on employee health benefits participation.

With data showing how employee income and health benefit plan participation
are closely intertwined, the study details the potential impact and
ramifications of the Affordable Care Act (ACA) on employers who will need to
comply with new mandates beginning in 2014.

Specifically, the ADP Research Institute study findings show that employees
with W-2 wages greater than 400% of the Federal Poverty Level (FPL), or
roughly $45,000 for a single individual under 2012 guidelines, consistently
participate in health coverage at a rate of 81%. However, as income declines
below 400% of the FPL, health plan participation rates decline sharply to just
37% for single employees earning between $15,000 and $20,000 per year.

"While no one can predict the future, the ADP Research Institute findings
suggest that lower income employees may avoid participation in a health plan
that consumes a significant percentage of their income," said Tim Clifford,
president of ADP Benefits Administration Services. "Clearly, employer to
employee communications will be essential in explaining the options moving

Other key findings of the ADP Research Institute study include:

  oAcross the entire study population, approximately 8.6% of single,
    full-time employees pay 9.5% or more of their W-2 earnings to obtain
    health coverage. However, among a certain subset of employers, nearly one
    out of every four employees spent more than 9.5% of their wages on health
    coverage. According to the ACA, beginning in 2014, employers may begin
    paying an annual penalty of $3,000 (calculated monthly) for every employee
    for which the premium for self-only coverage exceeds 9.5% of their wages
    (with respect to each full-time employee who receives a federal premium
    credit for public exchange coverage, assuming the employer offers health
    insurance coverage to at least 95% of full-time employees).
  oEmployees earning $22,340 or more per year (200% of the FPL for a single
    wage earner) may still be better off obtaining coverage through their
    employer's group health plan, despite affordability issues, rather than
    participating in a public health exchange with government-provided

"While many project that the impact of the ACA will be most significant upon
small businesses, certain industries, such as retail, hospitality,
construction and business services, could face a dramatic increase in the
number of employees that are newly eligible for health benefits," notes
Clifford. "In some cases, employers could face a sharp increase in the number
of covered employees and subsequent costs, and if they choose to stop offering
employer-sponsored benefits, they may face a significant tax penalty."

"How employers choose to comply with ACA requirements can have a very
significant impact upon multiple aspects of their business and their human
capital management strategy," Clifford adds. "While increases in total health
care benefit plan costs and potential penalties can have a direct impact upon
revenue, employers also need to consider the full business implications of
their benefits decisions, as they can affect employee compensation, company
reputation, and recruitment and retention."

To request a free copy of ADP's "Planning for Health Care Reform: How Income
Impacts Employee Health Benefits Participation" study, and access a video as
well as related infographics and articles, please click here or visit

Upcoming Webinar
On March 28, 2013, Chris Ryan, ADP Vice President of Strategic Advisory
Services, will conduct an in-depth webinar focused on Health Care Reform and
share research findings to help employers examine the benefit purchasing
habits of newly eligible employees under the ACA. Entitled: Health Care
Reform: How Income Impacts Participation in Employee Health Benefits, the
webcast will be available at 11:00 a.m. ET on Thursday, March 28. To register
and attend, please visit

About the ADP Research Institute
The ADP Research Institute provides insights to leaders in both the private
and public sectors around issues in human capital management, employment
trends, and workforce strategy.

About ADP
ADP, Inc. (NASDAQ: ADP), with more than $10 billion in revenues and
approximately 600,000 clients, is one of the world's largest providers of
business outsourcing and human capital management solutions. Leveraging over
60 years of experience and a global footprint spanning more than 40 countries,
ADP offers a wide range ofhuman resource, payroll,talent management,
taxandbenefits administration solutionsfrom a single source, and helps
clients comply with regulatory and legislative changes, such as the Affordable
Care Act. ADP's easy-to-use solutions for employers provide superior value to
companies of all types and sizes. ADP is also a leading provider of integrated
computing solutions toauto, truck, motorcycle, marine, recreational vehicle,
and heavy equipment dealersthroughout the world. For more information about
ADP or to contact a local ADP sales office, reach us at 1.800.225.5237 or
visit the company's Web site


Jim Larkin
(973) 407-9714


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