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September 17, 2010
SHRM Poll: Organizations’ Response to Health
Care Reform—Challenges and Actions
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
Health Care Reform Series: Poll 2Introduction
Landmark legislation that brought about major reforms in health care coverage in the United States was enacted in March 2010. The law affects employers and HR professionals in a variety of ways. SHRM will be conducting a series of polls on health care reform and its implications for employers and employees. This presentation covers the findings from the second poll in this series, which was conducted in July 2010.
2
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
Key Findings
• How well do organizations understand the specific aspects of the health care reform law? 50% of organizations have taken some type of action in response to the passing of the health care reform bill. Due to a lack of clarity on the specifics of the law, another 50% have not taken action or are unsure if action has been taken. Sixty-four percent of HR professionals are having difficulty understanding the gray areas and details of the law, 52% are not comfortable with what they know about the law and 54% see lack of understanding as the main implementation barrier. Clearly, HR professionals are waiting on additional information to make informed decisions.
• Where are organizations turning to learn about the health care reform law? Nearly 75% of organizations report using an insurance broker to inform them on the new law. Organizations that have not yet taken action are likely relying on information from their insurance broker on how to proceed.
• What are the implementation barriers of the health care reform law? Lack of overall understanding of the details of the law, implementation costs and employee out-of-pocket costs were reported as the main barriers to implementing the new law.
• What actions are organizations taking in response to the new health care reform law? The top five actions are: 1) working with legal and/or benefits counsel to understand the implications of the law for the organization, 2) sending HR staff to training to learn the details of the law, 3) partnering with current health care benefits providers to design the 2011 health care plan, 4) developing health care cost analysis for organizational leadership, and 5) analyzing the short-term financial impact of the law and the feasibility of offering health care.
3
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
0%
10%
20%
30%
40%
50%
Yes No Not sure
50%
39%
11%
4
Since April 1, 2010, has your organization taken any action in response to the passing the new health care reform law?
Note: n = 1095
• 39% of respondents report having taken no action, and these findings are consistent with the data in the next three slides. Specifically, 64% of HR professionals are having difficulty understanding the gray areas and details of the law (see Slide 6); 52% are not comfortable with what they know about the law (see Slide 8); and 54% see lack of understanding as the main implementation barrier (see Slide 9). Clearly, HR professionals are waiting on additional information to make informed decisions.
• Respondents who report having taken no action and those who are not sure if action has been taken are likely relying on their insurance broker to take action, as nearly three-quarters of HR professionals report using an insurance broker to inform them on the new law (see Slide 10).
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
Since April 1, 2010, has your organization taken any action in response to the passing of the new health care reform law?
• Publicly owned for-profits (62%) were more likely than privately owned for-profits (47%) to report that they have
taken action in response to the passing of the new health care reform law.
• Organizations whose primary medical benefit is currently self -insured (61%) were more likely than organizations
with insured (44%) primary medical benefit to report that they have taken action in response to the passing of the
new health care reform law.
5
Comparison by Organization’s Sector and Medical Benefit Funding
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
0%
1%
2%
2%
7%
11%
13%
31%
33%
0% 10% 20% 30% 40%
Keeping the C-suite informed about the implications of the new law
I don’t see anything problematic about the new law for HR
Keeping employees informed about the implications of the new law
The short compliance deadlines
Keeping track of when various parts of the law take effect
Determining impact on future total compensation strategy
Keeping up with the various regulations and relating them to the appropriate provisions
Understanding the details of the new law
The grey areas of the new health care reform law
6
In your opinion as an HR professional, what would you say is the biggest problem for HR caused by the new health care reform law?
Note: n = 774.
• 64% of HR professionals are having difficulty understanding the gray areas and details of the law.
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
In your opinion as an HR professional, what would you say is the biggest problem for HR caused by the new health care reform law?
• The grey areas of the new health care reform law (by medical benefit funding): Self-insured organizations
(37%) were more likely than insured organizations (28%) to report the grey areas of the new health care reform law
as a problem for HR.
• Understanding the details of the new law (by medical benefit funding): Insured organizations (36%) were more
likely than self-insured organizations (28%) to report understanding the details of the new health care reform law as
a problem for HR.
• Determining impact on future total compensation strategy (by operations location): Organizations with
multinational operations (15%) were more likely than U.S.-based (10%) organizations to report determining impact
on future total compensation strategy as a problem for HR .
7
Comparison by Organization’s Operations Location and Medical Benefit Funding
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
What is your level of agreement with the following statement:"I am comfortable with what I know about the new health care reform law."
0%
10%
20%
30%
40%
50%
Strongly disagree Disagree Agree Strongly agree
11%
41%
45%
3%
8Note: n = 774
• 52% of HR professionals are not comfortable with what they know about the law.
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
6%
1%
3%
5%
15%
16%
37%
54%
0% 10% 20% 30% 40% 50% 60%
Other
Lack of support by unions
Lack of support by employees
Lack of support by senior management
Not applicable, there is no implementation barrier for my organization
Employee out-of-pocket cost
Cost of implementing
Lack of overall understanding of details of the new law and its impact on my organization
9
In general, what do you think is the main implementation barrier of the new health care reform law for your organization?
Note: n = 759. Percentages do not total 100% as multiple responses were allowed. Respondents were allowed to select their top two options.
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
12%
17%
30%
42%
54%
73%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Other
Internal experts
Consultants
Legal counsel (internal or external)
SHRM’s resources on the new health care reform law
Insurance broker
10
What are the resources your organization is currently using in regard to the new health care reform law?
Note: n = 759. Percentages do not total 100% as multiple responses were allowed. Respondents were allowed to select their top two options.
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
What are the resources your organization is currently using in regard to the new health care reform law?
• Insurance broker (by staff size): Smaller organizations (those with fewer than 2,500 employees) were more likely than organizations with
2,500 to 24,999 employees to report that they are currently using insurance broker as one of their resources in regard to the new law.
• SHRM’s resources on the new health care reform law (by staff size): Smaller organizations were more likely than organizations with
2,500 to 24,999 employees to report that they are currently using SHRM’s resources as one of their resources in regard to the new law.
• Legal counsel (internal or external) (by staff size): Larger organizations (those with 500 or more employees) were more likely than
smaller organizations (100 to499 employees) to report that they are currently using legal counsel as one of their resources in regard to the
new law.
11
Comparison by Organization Staff Size
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•50 to 99 employees (97%)
•100 to 499 employees (85%)
•500 to 2,499 employees (75%)
•2,500 to 24,999 employees
(55%)Smaller organizations > larger
organizations
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•100 to 499 employees (68%) •2,500 to 24,999 employees
(40%)Smaller organizations > larger
organizations
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•100 to 499 employees (28%) •500 to 2,499 employees (49%)
•2,500 to 24,999 employees
(57%)
•25,000 or more employees
(57%)
Larger organizations > smaller
organizations
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
What are the resources your organization is currently using in regard to the new health care reform law?
• Consultants (by staff size): Larger organizations (those with 500 to 24,999 employees) were more likely than organizations with 100 to 499
employees to report that they are currently using consultants as one of their resources in regard to the new law.
• Internal experts (by staff size): Larger organizations (those with 2,500 to 24,999 employees) were more likely than smaller organizations
(500 to 2,499 employees) to report that they are currently using internal experts as one of their resources in regard to the new law.
12
Comparison by Organization Staff Size (continued)
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•100 to 499 employees (18%) •500 to 2,499 employees (34%)
•2,500 to 24,999 employees
(57%)
Larger organizations > smaller
organizations
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•500 to 2,499 employees (18%) •2,500 to 24,999 employees
(32%)Larger organizations > smaller
organizations
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
What are the resources your organization is currently using in regard to the new health care reform law?
Differences Based on
Organization Sector
Differences
Based on
Organization’s
Operations
Location
Differences
Based on
Medical Benefit
Funding
Differences
Based on Union
Status
Insurance broker
Privately owned for-profits
(80%) & nonprofits (81%) >
publicly owned for-profits
(60%) & government (59%)
U.S.-based only
organizations (76%)
> multinational
operations (66%)
Insured (83%) > self-
insured (66%)
Non-unionized (75%)
> Unionized (65%)
SHRM’s resources on the new health care reform law
Privately owned for-profits
(59%) & government (66%)
> publicly owned for-profits
(43%)
U.S.-based only
organizations (56%)
> multinational
operations (43%)
Insured (59%) > self-
insured (51%)
Legal counsel (internal or external)Publicly owned for-profits
(56%) > privately owned
for-profits (37%)
Multinational
operations (50%) >
U.S.-based only
organizations (39%)
Self-insured (52%) >
insured (29%)
Unionized (51%) >
non-unionized (40%)
Consultants
Publicly owned for-profits
(44%) > privately owned
for-profits (25%) &
nonprofits (27%)
Multinational
operations (42%) >
U.S.-based only
organizations (27%)
Self-insured (43%) >
insured (15%)
Unionized (41%) >
non-unionized (28%)
Internal expertsPublicly owned for-profits
(28%) > privately owned
for-profits (15%)
Multinational
operations (22%) >
U.S.-based only
organizations (16%)
Self-insured (20%) >
insured (14%)
13
Comparison by Selected Organizational Demographics
Note: Blank cell indicates that there were no significant differences in this category.
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
What actions has your organization taken in response to the passage of the new health care reform bill?
Already
Doing/Done
Planning
to Do
Currently NOT
Doing and Have
NO Plans to Do
Working with legal and/or benefits counsel to help the organization understand the
implications of the new law 80% 15% 5%
Sending HR staff in organization to classes (i.e., attending seminars, participating in
webcasts on this topic) to learn details of the new law and its impact on organization 78% 14% 8%
Partnering with current health benefits provider to design 2011 health care plan that will
include areas affected by the new law 75% 24% 1%
Developing health care cost analysis for organization’s leaders 59% 35% 7%
Analyzing short-term financial impact of the new law and the feasibility of offering
health care 57% 33% 10%
Developing a new health care strategy plan for our organization 48% 39% 13%
Developing an employee communication strategy related to the new law 45% 46% 9%
Developing employee communication on the impact of the new law on the
organization’s health care plan and the employees 41% 54% 6%
Analyzing long-term financial impact of the new law and the feasibility of offering health
care 38% 54% 9%
Communicating impact of the new law to employees 37% 57% 7%
Communicating impact of the new law to retirees 12% 40% 48%
14
Note: n = 395-427. Percentages do not total 100% due to rounding. Only respondents whose organizations have taken action(s) in response to the
passing of the new health care reform law were included in this analysis. “Not sure/not applicable” responses were excluded from this analysis.
• HR professionals appear to be focused first on understanding the law and its implications for the organization and employees before communicating with employees/retirees.
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
What actions has your organization taken in response to the passing of the new health care reform law since April 1, 2010?
• Partnering with current health benefits provider to design 2011 health care plan that will include areas affected by the new health
care reform law (by staff size): Larger organizations (those with 2,500 to 24,999 employees) were more likely than organizations with
fewer than 500 employees to report that they are partnering with their current health benefits provider to design 2011 health care plan that
will include areas affected by the new law.
• Developing health care cost analysis for organization’s leaders (by staff size): Larger organizations (those with 2,500 to 24,999
employees) were more likely than organizations with fewer than 500 employees to report that they are developing health care cost analysis
for organization’s leaders.
• Analyzing short-term financial impact of the new law and the feasibility of offering health care (by staff size): Larger organizations
(those with 2,500 to 24,999 employees) were more likely than smaller organizations (fewer than 2,5000 employees) to report they are
currently analyzing short-term financial impact of the new law and the feasibility of offering health care.
15
Comparison of Actions Organizations Have Taken by Organization Staff Size
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•100 to 499 employees (58%) •2,500 to 24,999 employees
(84%)Larger organizations > smaller
organizations
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•100 to 499 employees (42%) •2,500 to 24,999 employees
(76%)Larger organizations > smaller
organizations
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•100 to 499 employees (37%)
•500 to 2,499 employees (59%)
•2,500 to 24,999 employees
(80%)Larger organizations > smaller
organizations
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
What actions has your organization taken in response to the passing of the new health care reform law since April 1, 2010?
• Developing a new health care strategy plan for our organization (by staff size): Larger organizations (those with 2,500 to 24,999
employees) were more likely than organizations with fewer than 500 employees to report that they are developing a new health care strategy
plan for their organization.
• Developing an employee communication strategy related to the new law (by staff size): Larger organizations (those with 2,500 to
24,999 employees) were more likely than organizations with fewer than 2,500 employees to report that they are developing an employee
communication strategy related to the new law.
• Developing employee communication on the impact of the new law on organization’s health care plan and the employees (by staff
size): Larger organizations (those with 2,500 to 24,999 employees) were more likely than smaller organizations (500 to 2,499 employees) to
report they are currently developing employee communication on the impact of the new law on organization’s health care plan and the
employees.
16
Comparison of Actions Organizations Have Taken by Organization Staff Size (continued)
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•100 to 499 employees (35%) •2,500 to 24,999 employees
(62%)Larger organizations > smaller
organizations
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•100 to 499 employees (36%)
•500 to 2,499 employees (38%)
•2,500 to 24,999 employees
(61%)Larger organizations > smaller
organizations
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•500 to 2,499 employees (35%) •2,500 to 24,999 employees
(58%)Larger organizations > smaller
organizations
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
What actions has your organization taken in response to the passing of the new health care reform law since April 1, 2010?
• Analyzing long-term financial impact of the new law and feasibility of offering health care (by staff size): Larger organizations (those
with 2,500 to 24,999 employees) were more likely than smaller organizations (500 to 2,499 employees) to report they are currently analyzing
long-term financial impact of the new law and their ability to offer health care.
• Communicating impact of the new law to employees (by staff size): Larger organizations (those with 2,500 to 24,999 employees) were
more likely than smaller organizations (500 to 2,499 employees ) to indicate that they are communicating impact of the new law to
employees.
17
Comparison of Actions Organizations Have Taken by Organization Staff Size (continued)
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•500 to 2,499 employees (30%) •2,500 to 24,999 employees
(53%)Larger organizations > smaller
organizations
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•500 to 2,499 employees (32%) •2,500 to 24,999 employees
(61%)Larger organizations > smaller
organizations
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
What actions has your organization taken in response to the passing of the new health care reform law since April 1, 2010?
Differences
Based on
Organization
Sector
Differences
Based on
Organization’s
Operations
Location
Differences
Based on
Medical Benefit
Funding
Differences
Based on Union
Status
Working with legal and/or benefits counsel to help
organization understand the implications of the new law Self-insured (83%) >
insured (73%)
Sending HR staff in our organization to classes (i.e.,
attending seminars, participating in webcasts on this topic) to
learn details of the new law and its impact on the
organization
Privately owned for-
profits (86%) >
publicly owned for-
profits (70%)
Partnering with current health benefits provider to design
2011 health care plan that will include areas affected by the
new health care reform law
Self-insured (81%) >
insured (64%)
Developing health care cost analysis for organization’s
leaders Self-insured (71%) >
insured (44%)
Unionized (73%) >
non-unionized (58%)
Analyzing short-term financial impact of the new law and the
feasibility of offering health care
Publicly owned for-
profits (73%) >
privately owned for-
profits (55%)
Multinational
operations (73%) >
U.S.-based only
organizations (55%)
Self-insured (69%) >
insured (43%)
Unionized (72%) >
non-unionized (57%)
Developing a new health care strategy plan for our
organization Self-insured (57%) >
insured (34%)
18
Comparison of Actions Organizations Have Taken by Selected Organizational Demographics
Note: Blank cell indicates that there were no significant differences in this category.
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
What actions has your organization taken in response to the passing of the new health care reform law since April 1, 2010?
Differences
based on
organization
sector
Differences
based on
organization’s
operations
location
Differences
based on medical
benefit funding
Differences
based on union
status
Developing an employee communication strategy related to
the new law Self insured (51%) >
insured (34%)
Developing employee communication on the impact of the
new law on organization’s health care plan and the
employees
Multinational
operations (53%) >
U.S. based only
organizations (37%)
Self insured (50%) >
insured (25%)
Analyzing long-term financial impact of the new law and the
feasibility to offer health care
Publicly owned for-
profits (55%) >
privately owned for-
profits (35%)
Self insured (45%) >
insured (28%)
Communicating impact of the new law to employees
Multinational
operations (49%) >
U.S. based only
organizations (32%)
Self insured (41%) >
insured (29%)
19
Note: Blank cell indicates that there were no significant differences in this category.
Comparison of Actions Organizations Have Taken by Selected Organizational Demographics (continued)
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
Since the enactment of the new health care reform law, has there been an increase or a decrease in contact from your organization’s plan participants (e.g., employees, spouses, retirees) with your HR/benefits staff or third-party administrator (TPA)?
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
From retirees
From non-employee plan participants (e.g., spouse)
From active employee participants
1%
1%
1%
90%
91%
80%
10%
8%
19%
Decrease About the same Increase
20
Note: n = 291-715. Percentages do not total 100% due to rounding. “Not sure/not applicable” responses were excluded from this analysis.
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
Since the enactment of the new health care reform law, has there been an increase or a decrease in contact from your organization’s plan participants (e.g., employees, spouses, retirees) with your HR/benefits staff or third-party administrator (TPA)?
• Increased contact from active employee participants (by medical benefit funding): Self-insured organizations (25%) were more likely
than insured organizations (12%) to report that there has been an increase in contact with HR/benefits staff or TPA from active employee
participants.
• Increased contact from active employee participants (by sector): Publicly owned for-profits (27%) were more likely than privately owned
for-profits (14%) to report that there has been an increase in contact with HR/benefits staff or TPA from active employee participants.
21
Comparison by Organization’s Sector and Medical Benefit Funding
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
How is your organization’s primary medical benefit currently funded?
Self-insured, 56%
Insured, 44%
22Note: n = 749
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
How is your organization’s primary medical benefit currently funded?
• By staff size: Larger organizations (those with 500 or more employees) were more likely than organizations with fewer than 500 employees
to report that their organization’s primary medical benefit is self-insured.
• By operations location: Organizations with multinational operations (71%) were more likely than U.S.-based (51%) organizations to report
that their organization’s primary medical benefit is self-insured.
• By sector: Publicly owned for-profits (72%) were more likely than privately owned for-profits (50%) and nonprofits (49%) to report that their
organization’s primary medical benefit is self-insured.
• By union status: Unionized organizations (64%) were more likely than non-unionized (54%) organizations to report that their organization’s
primary medical benefit is self-insured.
23
Comparison by Organization’s Staff Size, Sector, Operations Location, Sector and Union Status
Smaller Organizations Larger Organizations Differences Based on
Organization Staff Size
•100 to 499 employees (39%) •500 to 2,499 employees (69%)
•2,500 to 24,999 employees
(84%)
•25,000 or more employees
(84%)
Larger organizations > smaller
organizations
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
Demographics: Organization Industry
Industry
Manufacturing –other 18%
Health care, social assistance (e.g., hospitals, clinics) 13%
Financial services (e.g., banking) 8%
Services –professional, scientific, technical, legal 7%
Educational services/education 6%
Government/public administration—federal, state/local, tribal 5%
Retail/wholesale trade5%
Construction, mining, oil and gas 4%
Insurance4%
24
Note: n = 754. Percentages do not total 100% due to rounding.
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
Demographics: Organization Industry (continued)
Industry
Other services (e.g., other nonprofit, church/religious organizations) 4%
Transportation, warehousing (e.g., distribution) 3%
High-tech 3%
Services—accommodation, food and drinking places 3%
Utilities 2%
Real estate, rental, leasing 2%
Publishing, broadcasting, other media 2%
Manufacturing—auto/auto-related 2%
Arts, entertainment, recreation 1%
Consulting 1%
Telecommunications 1%
Association—professional/trade 0%
Pharmaceutical 0%
Biotech 0%
Other 5%
25
Note: n = 754. Percentages do not total 100% due to rounding.
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
Demographics: Organization Sector
4%
8%
20%
21%
47%
0% 10% 20% 30% 40% 50% 60%
Other
Government sector
Nonprofit organization
Publicly owned for-profit organization
Privately owned for-profit organization
26Note: n = 756
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
Demographics: Organization Staff Size
6%
27%
35%
26%
5%
0%
10%
20%
30%
40%
50%
50 to 99 employees 100 to 499 employees 500 to 2499 employees 2500 to 24999 employees
25000 or more employees
27
Note: n = 497. Percentages do not total 100% due to rounding.
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
Demographics: Other
28
Note: n = 763
U.S.-based operations 75%
Multinational operations 25%
Single-unit company: A
company in which the
location and the company
are one and the same
29%
Multi-unit company: A
company that has more than
one location
71%
Multi-unit headquarters determines
HR policies and practices
64%
Each work location determines HR
policies and practices
1%
A combination of both the work
location and the multi-unit
headquarters determine HR policies
and practices
35%
Is organization a single-unit company or a multi-
unit company?
Are HR policies and practices determined by
the multi-unit corporate headquarters, by each
work location or both?
Does the organization have U.S.-based
operations (business units) only or
does it operate multinationally?
Note: n = 750
Note: n = 556
• 19% of organizations indicated that
employees at their work location were
unionized.
Note: n = 755
Organizations’ Response to Health Care Reform – Challenges and Actions | ©SHRM 2010
SHRM Poll: Organizations’ Response to Health Care Reform – Poll 2
• Response rate = 21%
• Sample comprised of 1,095 randomly selected HR professionals with the job title of manager and above, as well as HR professionals in the compensation and benefits functional area. All analyses were based on respondents working at organizations with a staff size of 50 employees or more.
• Margin of error is +/- 3%
• Survey fielded July 22–August 3, 2010
29
Methodology
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