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How Will The Affordable Care Act Change Employers’ Incentives To Offer Insurance?

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How Will The Affordable Care Act Change Employers’ Incentives To Offer Insurance?

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Working Paper Number CES-14-02

Abstract

How Will The Affordable Care Act Change Employers’ Incentives To Offer Insurance?
Download How Will The Affordable Care Act Change Employers’ Incentives To Offer Insurance? [PDF - <1.0 MB]

This study investigates how changes in the economic incentives created by the Affordable Care Act (ACA) will affect the probability that private-sector U.S. employers will offer health insurance. Using the Medical Expenditure Panel Survey Insurance Component for 2008-2010, we predict employers’ responses to key ACA provisions. Our simulations predict that overall demand for insurance will rise, driven by workers’ desire to avoid the individual mandate penalty and the availability of premium tax credits in exchanges. Our analyses also suggest that the average probability of an establishment offering insurance will decline from .83 to .66 with ACA implementation, although there is considerable variation by firm size, industry and union status.

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Page Last Revised - October 8, 2021
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