Mercer surveyed 894 employers last month about whether they expect PPACA rules will cause costs to rise in 2014, and if so, by how much. Twenty-eight percent of respondants said that compliance with PPACA mandates slated to go into effect in 2014 – most significantly, extending coverage to all employees working on average 30 or more hours per week, auto-enrolling new full-time employees and ensuring that plans pay for at least 60 percent of covered services – will add at least another 3 percent to their projected 2014 plan costs, with 15 percent expecting an additional 5 percent or more.

About the same number (27 percent) predict a relatively modest increase of 2 percent or less, and 15 percent said their plans were already in compliance and would see no cost increase. The remaining 29 percent could not estimate the impact.

Despite cost concerns, employers remain committed to offering medical coverage to their employees. Just 2 percent of survey respondents say they are "very likely" to terminate medical plans after the insurance exchanges are operational, with another 6 percent "likely" to do so. Mercer asked the same question in a survey of more than 2,800 employers conducted a year ago, just a few months after health reform was signed into law, and employers' opinions on this question are essentially unchanged.  

The No. 1 concern for employers is an excise tax on high-cost plans. The tax, which is not slated to take effect until 2018, was a "very significant concern" for 22 percent of the survey respondents and a "significant concern" for an additional 23 percent. About a fourth (28 percent) say it's only a "slight concern" and 27 percent say it's "not an issue" for their organizations

The excise tax provides employers with a strong incentive to keep health plan cost down. Their top long-term cost management strategy is to add or strengthen programs or policies to encourage more health-conscious behavior – 54 percent say they are very likely to pursue this strategy while another 38 percent say they are likely to do to.

"Because the excise tax is based on the total cost to cover an individual or a family, employers can't avoid reaching the tax threshold simply by shifting cost to employees. Improving employee health is a way to lower the total cost of health care," Watts said.

Another way to reduce plan cost is to carve out various non-medical benefits such as dental and vision and offer them to employees as voluntary benefits. Over a fourth of respondents (29 percent) say they are likely to take this approach.

But, as enrollment levels climb, some employers are considering ways to control their own spending on health benefits through other means. Thirty-eight percent say it's likely or very likely that they will reduce their spending on dependent coverage in relation to employee-only coverage.  

Of the largest survey respondents – those with 5,000 or more employees – 45 percent are likely to reduce spending on dependent coverage, compared to 30 percent of those with fewer than 500 employees.

And some employers are considering moving to some type of "defined contribution" approach to paying for health coverage. About 26 percent of respondants say they are considering keeping the employer contribution the same for all plans offered, so that employees pay more for more expensive plans. Fewer (8 percent) are considering raising the employer contribution by a set amount each year, regardless of the actual increase in cost, with employees absorbing the rest of the increase, or simply providing employees with a fixed dollar subsidy to purchase coverage on their own (9 percent).

Of the employer-related reform provisions slated to go into effect in 2014, auto-enrolling new full-time employees seems to be causing the most headaches. Auto-enrollment is seen as a "very significant" or "significant" concern by 21 percent of employers, but for those with at least 5,000 employees, its cited as a significant or very significant concern among 28 percent.

Employers are already considering how to manage the cost of the auto-enrollment requirement. Among survey respondents that currently offer only one medical plan, while most will simply use their current plan as the default plan for auto-enrolling new full-time employees, 10 percent say they will add a new, lower-cost plan to use as the default plan and 3 percent will change to a new, lower-cost plan for all employees. Among those respondents that currently offer a choice of medical plans, 65 percent will use their current lowest-cost plan as the default plan; 29 percent will use their standard plan (the plan with the highest enrollment) and 7 percent will add a new plan as the default for auto-enrollment. The largest employers – those with 5,000 or more employees – are the most likely to add a new plan (11 percent).

Employers in the retail industry are particularly concerned about offering coverage to their part-time employees. Just 17 percent of employers are concerned about the rule that employers must offer "affordable" coverage to all employees working an average of 30 hours or more a week in a month, but it was cited as a concern for 37 percent of those in the wholesale/retail industry, which relies heavily on part-time labor.

Among the 28 percent of respondents that have part-time employees but currently do not offer coverage to all employees working 30 or more hours per week, one-half say that they are most likely to change their workforce strategy so that fewer employees work 30 hours or more a week. One-fourth are most likely to make all employees eligible for the current full-time employee plan, while 17 percent will offer only a lower-cost plan to part-timers. Only 7 percent say they would seriously consider making no or minimal changes to increase the number of eligible employees and instead pay the required penalty. No respondents thought they were likely to terminate employee health plan coverage as a result of this new rule.