NEW YORK – The Wall Street Journal asked a panel of experts
to address whether the Affordable Care Act (ACA) will lead employers to stop
offering health insurance.
The panelists included Kevin Kuhlman, manager of legislative
affairs at the National Federation of Independent Business; Christine Eibner, an
economist at RAND Corp.; and David Marini, managing director, strategic
advisory services, at Automatic Data Processing.
According to Kuhlman, while the precise effects are
speculative, “We hear from NFIB members just above the 50-employee threshold
that they do plan to discontinue health-insurance coverage or make other
personnel decisions to avoid the employer mandate,” he said. “Some smaller NFIB
members are concerned that their offer of coverage to employees will restrict
certain employees from accessing generous tax credits and cost-sharing
subsidies in the individual exchanges.”
Eibner added: “If the law is unable to contain
health-insurance costs…we believe it will lead many employers to stop offering
health insurance.” However, she said her company’s model predicts an overall
increase in the number of employees enrolled in employer-sponsored coverage.
‘[O]ur most recent estimates showing an increase of about four million people
enrolled on employer-sponsored insurance.”
Meanwhile, Marini said that while he doesn’t believe the law
will prompt company’s to drop coverage for their employees, it would affect the
benefits that they offer. “In a May 2012 ADP survey we found that more
employers are offering wellness programs, health savings accounts and
high-deductible health plans,” he said, adding that the law will also force
companies to manage their part-time population so that they do not get
classified as eligible for health insurance coverage.
The panelists also addressed the 50-employee,
30-hours-per-week threshold (companies fitting such a profile would be required
to offer health insurance to their employees) and whether companies will seek
to cut staff or limit hours to fall under those numbers.
“There is some evidence from past health-insurance reforms
to suggest that firms do make these types of structural changes to avoid
requirements such as mandates,” Eibner said. “However, coverage in employer-sponsored plans also
rose during the same time period, suggesting that the shift to part-time work
was not large enough to fully counteract the effect of the mandate.”
Marini said he expects companies in the retail, hospitality
and food/beverage industries to limit the number of hours to below 30. However,
he said some specialty retailers are assessing sales associate performance
numbers to determine whether more experienced workers produce better sales.
“Ultimately, this could lead them to hire more full-time
employees with benefits,” he said.
Kuhlman said that he has heard from NFIB members who have
taken steps to reduce employee hours from full- to part-time status, or at
least that are considering the move. He said there’s a simple solution to such
a scenario.