Affordable Care Act

Texas Employers Stop Dropping Health Benefits Under Affordable Care Act

Rice University healthcare economist Vivian Ho attributes a slight uptick in the number of Texans who get their health insurance through their jobs to the Affordable Care Act.

It’s Halloween, the season of ghosts and goblins, but there’s one persistent bugaboo about the Affordable Care Act that perhaps can be banished forever: the fear that once the law went into effect, employers would be motivated to drop health insurance as a job benefit.

“There had been a lot of talk before the Affordable Care Act was passed that there would be a decline in employer-sponsored insurance,” said Vivian Ho, a healthcare economist at Rice University’s Baker Institute for Public Policy. “Because employers would decide ‘Why do I need to provide insurance anymore? Because I can just send my workers off to the health insurance marketplace to get health insurance from the federal government.’”

But a new Texas-wide survey shows that’s just not happening. It looked at job-based insurance in 2013, right before the law went into effect, and then compared it to this past March.

“What we’ve found is employer-sponsored insurance is remaining pretty steady,” said Ho, who co-authored the report along with Elena Marks, president and CEO of the Episcopal Health Foundation.

Before the law, 67 percent of workers in Texas got insurance through their jobs. The survey revealed a slight uptick to 68 percent.

The law penalizes most medium and large companies that don’t insure workers, and penalizes many workers if they don’t sign up for that insurance. (There are exceptions for low-income workers, particularly in states that did not expand Medicaid.)

Ho theorized that more workers are now signing up for coverage that they had previously declined, citing the high cost of premiums. But for many workers the premiums may now be cheaper than the tax penalty they’d have to pay for not being covered.  

“I think that most of it is that workers are doing a better uptake,” Ho said. “Lots of people realized that there was going to be a penalty.”

Ho also discussed anecdotal reports that some employers, such as her own Rice University, have encouraged sign-ups by offering new lower-cost health plan options that appeal to their lower-salaried workers.

The trend in Texas mirrors what is happening nationally – with job-based insurance holding steady after the law passed. Before the law, employers were increasingly dropping the benefit.

 

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