When the Affordable Care Act was passed in 2010, many health insurance agents worried they would lose employee benefits accounts as businesses dropped increasingly expensive coverage. Yet new evidence suggests that most companies have stayed committed to providing health insurance to their employers.
According to a report in the
New York Times, healthcare and other benefits offerings remain an important recruitment and retention tool in a still difficult economy. Despite the number of offerings in the individual marketplace since the advent of the ACA, the most desirable of employees still expect health insurance – and companies are responding.
“The employer-based system is alive and well,” Jeff Alter, the chief executive of commercial insurance business for UnitedHealthcare, told the
Times.
Companies who continue to offer health insurance get a significant federal tax break, as well as the continued loyalty of their employees. According to new federal data, most workers whose companies drop coverage expect an increase in salary to pay for outside insurance. Without that, many say they would look for a new job.
The push for benefits has been so great, that even government budget officials are revising estimates to lower the number of people they believe will lose coverage because of the ACA. In fact, they predict employers will remain the major source of health insurance coverage for working Americans through 2026.
Currently, about 155 million Americans have employer-based health insurance coverage. By 2019, the Congressional Budget Office expects that number to drop to 152 million, though they expect the figure to remain stable through the end of the decade.
The ACA has also not materially affected the employer plans being offered from insurers, as some feared. According to Larry Levitt, a senior executive at Kaiser, the industry continues to be dominated by familiar names like Blue Cross, UnitedHealthcare and Anthem.
“Employer coverage is much more stable than anyone anticipated,” Levitt said.
In addition to workers’ continued expectation of benefits, companies say they continue to offer healthcare due to the lack of an enticing alternative for their workers. The online marketplaces created through the ACA have been less than ideal, employers say, with significant delays, withdrawal of insurers and spiking health premiums.
Despite this news, some businesses are withdrawing their health insurance offerings. The small business sector is significantly more likely to drop coverage, with the percentage of employers offering benefits decreasing from 68% in 2010 to 56% in 2015, according to a survey from the Kaiser Family Foundation.
However, another survey – this one from
Mercer – suggests that companies are now less likely to exit the market than they were a few years ago. In 2013, roughly one-fifth of employers with fewer than 500 workers say they were considering dropping coverage in the next five years, compared with 7% today.
“The demise of employer-based coverage was definitely overstated,” said Michael Thompson, chief executive of the National Business Coalition on Health. Title: here’s how Obamacare has affected employer coverage.
