ACA: Employers Not Deterred From Sponsoring Health Insurance

Larry Hand

December 24, 2014

Early data indicate that the Affordable Care Act (ACA) has not been a threat to employer-sponsored health insurance, as critics have contended it would be, according to an article published online December 19 in Health Affairs.

Fredric Blavin, PhD, and colleagues at the Urban Institute in Washington, DC, analyzed data from the Health Reform Monitoring Survey for June 2013 to September 2014. They also looked at results from microsimulation models and data from the implementation of healthcare reform in Massachusetts.

The Health Reform Monitoring Survey is a quarterly survey of nonelderly workers on ACA implementation and outcomes.

The researchers found no statistical change in rates of employers offering health insurance between the beginning and end of the study period. Overall, 82% of employers offered insurance, including 61% of small firms, 93% to 94% of large firms, and 63% of companies with employees below 250% of poverty.

They found that even for small employers, ones whose incentives to offer insurance are most likely to decline, the rate of offer stayed at about 44%.

The researchers also found that the insurance take-up rate remained unchanged, with the exception of one change that approached significance: an increase in take-up from 70.0% to 73.6% among employees working in small firms with family income below poverty level.

"Thus, the incentives in current law, including the strong tax incentives to obtain coverage from employers because of the tax exemption of employer contributions to insurance and the individual mandate, remain a strong force," the researchers write. "The tax incentives mean that most workers are financially better off if they obtain coverage via employment."

Some critics had argued that subsidies provided to individuals to purchase individual insurance through marketplaces would lead to employers dropping health insurance plans for employers.

Although "it is arguably still too early to see the full effects of the ACA on employer-sponsored insurance," the researchers write, "results from this study, microsimulation predictions, and findings from employer resources in Massachusetts suggest that workers will continue to obtain health insurance through employers."

Health Aff. Published online December 19, 2014. Full text

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