(via NYTimes.com) The Affordable Care Act’s best-known and least-liked provision — the “individual mandate” — may be causing a trend counter to what some pundits have earlier predicted*: that fewer employees would purchase insurance through their place.**
For the first time, people must buy insurance this year or be subject to a tax penalty. In Massachusetts, a similar requirement changed the employer-sponsored insurance market in two ways, said Sharon Long, a senior fellow at the Urban Institute, who has studied the state’s experience. It encouraged more workers who were already being offered health insurance to take it — an effect roughly analogous to what Walmart (who is seeing more employees signup than expected) is experiencing. Second, it actually induced more employers to offer coverage to their workers — because, Ms. Long believes, workers began to demand insurance once they were required to have it. Overall, the percentage of Massachusetts residents with employer-based insurance went to 65.6 percent in 2008, when the health care law was up and running, up from 61 percent in 2006.
The first effect should apply nationwide. The second may be a quirk of the Massachusetts labor market, where health reform was broadly popular, and most businesses tend to pay high wages. Estimates from the Congressional Budget Office suggest that some small employers that currently offer insurance may stop doing so now that their workers have other options. Some analysts of the law (and many of its critics) forecast widespread employer “dumping” of workers into new health insurance marketplaces, but there’s little evidence so far that this is happening. The law includes a requirement that employers offer coverage to their workers or pay a fine, but the Obama administration has postponed its start.
Continue reading at NYTimes.com: “Why More, Not Fewer, People Might Start Getting Health Insurance Through Work”
*Previously, we’ve explained the theory of why less insurance will be purchased through the workplace.
**The provisions of the Affordable Care Act related to businesses do not apply to companies with less than 50 employees.
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