How the ACA has affected employer-based coverage

Dan Gorenstein Sep 10, 2014
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How the ACA has affected employer-based coverage

Dan Gorenstein Sep 10, 2014
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We’ve heard for years about how the Affordable Care Act — Obamacare — could make it near impossible for businesses to keep offering health coverage to their workers.

Well, the Kaiser Family Foundation’s annual employer health benefits survey — which is widely considered a benchmark in the health care industry — came out WednesdayLike everybody else, Kaiser Family Foundation Vice President Gary Claxton wanted to know: Did the new health care law upend employer-based health insurance, the market where 150 million Americans get their coverage?

“The first read for 2014 is that the ACA has had no real impact on premiums, nor did it lead to employers not to offer coverage,” he says.

You read right: No ACA-inspired premium spike.

Instead, there has been a modest 3 percent increase. Nearly the same number of employers are offering coverage; nearly the same number of workers are enrolling.

A critical question the survey doesn’t answer, however, is whether employers have begun cutting hours. Starting next year, people working 30 hours a week at firms with 100 employees or more must be offered insurance or face a penalty. 

While Kaiser’s Year 2 survey may come to a different conclusion, the bottom line to this year’s report is that the ACA has had a small impact on employers… with one possible exception: “There is no doubt that the Affordable Care Act’s exchanges have brought a lot of attention to the concept of retail health insurance,” says PricewaterhouseCooper’s Ceci Connolly.

Connolly says there’s something executives like about the exchange concept that the ACA has popularized. (If you aren’t familiar with exchanges, think Travelocity for health insurance.) The consulting firm Accenture predicts private exchange enrollment will top public enrollment by 2018.

Rosemarie Day with Day Health Strategies says more and more Americans are becoming smarter health care consumers.

“That’s kind of the notion of exchanges, is that you have to put something in to get something out. It’s not a benefit that’s just handed to you,” she says.

Day likens this potential shift to when companies moved away from pensions and towards 401k contributions. For workers, it meant more choice, and more responsibility.

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