Q: Has the Affordable Care Act resulted in job cuts, as some predicted?
A: Business groups said soon after the health care act became law in 2010 that the sweeping health-care overhaul would impose huge new costs on U.S. employers, leading to job losses.
Three years later, with the Patient Protection and Affordable Care Act in effect, none of the most dire predictions has come to pass. Insurance premiums for companies that offer health benefits increased less than 3 percent this year, the lowest rate in 16 years.
While Wal-Mart Stores became the latest large employer to scale back its health benefits this month, the change affects only part-time workers — saving the retailer an estimated $51 million a year.
“To the extent they thought that the employer market would explode because of it, or there would be severe disruption or anything like that, we certainly didn’t see that,” said Gary Claxton, a vice president at the Menlo Park, California-based Kaiser Family Foundation, a health research group.
One critical prediction came from Tom Donohue, the U.S. Chamber of Commerce president, who said in January 2011 that many companies were thinking about ending their employer-based plans to cope with the law’s new mandates.
That hasn’t happened. None of the more than 600,000 employers who are clients of Automatic Data Processing, the largest U.S. payroll firm, is planning to eliminate health benefits for full-time workers in response to the law sometimes called Obamacare.
“Companies view the Affordable Care Act as a compliance mechanism, as opposed to it changing, completely overhauling the landscape of America,” said Tim Nimmer, chief actuary for Aon Hewitt, a benefits consulting firm. Costs “are pretty much right in line with what they expected,” he said.
Donohue wasn’t available for an interview, said a spokeswoman for the Chamber.
Among corporations that saw little impact from the health- care law is Ruth’s Hospitality Group. The Winter Park-based operator of a chain of steakhouses offers benefits that exceed minimum requirements under the law for employees working as few as 23 hours. About half of the workers took the health plan and more are expected to join to avoid the penalty for not carrying insurance, said Chief Financial Officer Arne Haak.
The Affordable Care Act’s impact on U.S. companies has been an increase of about 3.6 percent in the cost of health benefits, said Brian Marcotte, president of the National Business Group on Health, a trade group that represents 395 large employers.
National spending on health care has also slowed. At least part of it may be attributed to the law, according to Katherine Baicker, a Harvard University health economist.
“It’s possible a more general effect arises from health-care providers, insurers, groups aiming to slow health-care spending on their own in advance of any provisions binding from the law,” Baicker said. Employers and their workers have benefited in the form of lower premium increases for their insurance plans. Other than a spike in 2011, after the law required plans to cover children until age 26 and eliminated cost limits on care, premium increases have averaged less than 5 percent a year since 2010, according to Kaiser.
“To the extent that health care can be provided more efficiently, that’s a good thing for everyone, employers and employees,” said Baicker, the Harvard economist.
Companies employing a high proportion of low-paid and part- time workers are likely to see the greater impact from the Affordable Care Act, because they previously didn’t offer insurance to those workers — or the employees often refused it.
– Alex Wayne and Thomas Black, Bloomberg News
