US health reform spurs change for big employers-survey

* Many big employers plan to drop spending limits

* Companies to shift costs to workers due to reforms

* 2011 costs seen up 9 pct, 1 percentage point due to law

(Adds comments from Darling, details on reform programs)

By Jon Lentz

WASHINGTON, Aug 18 (Reuters) - Many of the biggest U.S. companies are removing spending limits from their employees' health plans and taking other steps to comply with the new healthcare law, according to a report released on Wednesday.

Most of the companies surveyed also plan to shift more costs to employees to encourage them to limit spending as one of several efforts to rein in rising costs, according to the report by the National Business Group on Health.

The group, which represents large employers on healthcare issues, based its findings on a survey of 72 of its member companies in May and June. Members include many of the largest U.S. employers, including Wal-Mart Stores Inc


and General Electric Co


, but the report does not say which companies were surveyed.

The debate on healthcare reform, especially over whether it will increase costs for individuals and small businesses, has become a major issue ahead of the November midterm elections in which Democrats are fighting to maintain control of Congress.

The report shows companies expected their healthcare costs to grow by nearly 9 percent on average in 2011. That is about two percentage points higher than the 7 percent average increase for 2010, but just one percentage point was linked to the mandated changes under the law.

"U.S. employers have long struggled with healthcare costs," Helen Darling, National Business Group on Health president, said on Wednesday. "We as large employers know we are in the middle of a transformation, a transformation of how healthcare is financed and delivered in this country."

The law passed this spring includes several provisions that employer-based health insurance plans will have to abide by once the rules take effect on Sept. 23.

The survey found that 70 percent of the companies will have to eliminate lifetime dollar limits, or a cap on the amount an insurer will pay for covered expenses, while 13 percent will no longer be allowed to deny coverage for children with costly preexisting medical conditions. About a quarter will have to end annual limits on benefits.

Over half of the companies surveyed planned to tinker with benefits despite the risk of losing protected grandfathered status under the law and having to follow more new rules.

New plans or those that lose grandfathered status must cover preventive services such as mammograms and colonoscopies at no additional cost to patients. They also must allow access to a pediatrician or obstetrician without a referral.

"They're not holding up changes they want to make to maintain or retain grandfather status," said Darling. "They actually don't think it's that important."

About a fifth of the companies said they had scaled back changes to their health plans because of the law, while another fifth expected to make no adjustments at all.

These figures could change, since the survey was conducted before the Department of Health and Human Services put out final rules in June on how to maintain grandfathered status. Plans that significantly reduce benefits or increase costs beyond medical inflation will be considered a new plan.

Sixty-three percent of companies surveyed plan to shift more of the premium costs to employees next year. Other popular ways to reduce costs included wellness programs and consumer-directed health plans, which give enrollees more responsibility for how they spend their healthcare dollars.

More than six in ten companies applied for a temporary $5 billion program for early retirees included in the healthcare law. Only 3 percent of companies chose to adopt the law's voluntary long-term care program. (Reporting by Jon Lentz; Editing by Lisa Von Ahn, Phil Berlowitz)