• The cost-related and legal ramifications of health care reform present serious challenges to organizations’ ability to operate efficiently.
  • Most employers expect to make changes to their health care benefit program for all active employees and retirees by 2016.
  • Savvy organizations are preparing by looking closely at their total rewards strategy and employee value proposition.

The decision about reshaping employee health care benefits in response to reform legislation is a complex one for U.S. employers. And it’s one of the most critical decisions they will make in this decade. No matter what type of approach an organization takes to providing employee health care, there will be significant ripple effects on its ability to attract, engage and retain the workforce it needs.

How are employers preparing? Some are discontinuing their health care benefits for part-time employees and helping employees purchase coverage through insurance exchanges. Many are redesigning their benefit plans and changing employee coverage levels, while others are taking a wait-and-see approach. Still others are revising their workforce strategy and reward mix. Towers Watson research and client experience show that some organizations are starting to recognize how their response to health care reform will be more effective if they consider their total rewards strategy and overall employee value proposition as they make benefit decisions. This article explores this approach, and offers recommended actions to help employers examine their options and make wise decisions.

This article was originally published in the WorldatWork Journal, second quarter 2014 issue, and is reproduced with the permission of WorldatWork.