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Study finds minor changes in employer-sponsored health insurance offers after implementation of ACA

Overall offers of employer-sponsored health insurance didn’t change significantly following implementation of the Affordable Care Act (ACA) coverage provisions in 2014. The study used the nationally representative Medical Expenditure Panel Survey Insurance Component (MEPS-IC) and found that most employers either continued to offer or continued to not offer coverage between 2013 and 2014.

The results are published online as a web-first exclusive for the November issue of Health Affairs.

“The percentage of employers offering insurance coverage remained relatively stable after the first year of the ACA coverage expansion,” said Jean Abraham, Ph.D., lead author on the study and associate professor in the School of Public Health.

Approximately, 46.35 percent of private-sector employers offered coverage in both 2013 (before ACA) and in 2014 (after ACA), whereas 49.08 percent did not offer coverage either year. Between 2013-2014, 3.45 percent of employers dropped coverage, while 1.10 percent added coverage.

Despite relatively stable rates of employer-sponsored insurance, the analyses revealed that employers that were more likely to drop coverage included:

  • Small firms
  • Companies with a higher percentage of low-wage workers
  • Service-sector organizations
  • Newer establishments

“Our findings show that the ACA did not lead to large-scale reductions in employer-sponsored health insurance,” Abraham said. “Workforce and employer characteristics were the primary factors associated with dropping coverage.  In our analyses, we did not observe any significant associations between the probability that an employer dropped coverage and ACA-related policy variables, including changes in Medicaid income eligibility, Marketplace type, or changes in small employer group premium rating.”

The authors noted that 2014 is the first year the MEPS-IC asked employers about their offers of health insurance in the current and prior year, and thus it is not possible to compare these results directly to a trend.

They added that researchers should continue to study changes in employer provision of health benefits in order to determine longer-run effects of the ACA.

Coleman Drake, Ph.D. student at the School of Public Health, and Anne Royalty, Ph.D., from Indiana University-Purdue University Indianapolis, collaborated on the study.

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