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Burdens on business vs. benefits for employees sharply contested
Five years after the Affordable Care Act (ACA) was signed into law on March 23, 2010, its critics and champions see starkly different results. On March 19, 2015, the U.S. Senate Committee on Finance held hearings on “The Affordable Care Act at Five Years,” with testimony both lauding and lacerating the statue.
“The cost of health insurance is the most critical issue facing small business owners,” testified Holly Wade, director of research and policy analysis at the National Federation of Independent Business (NFIB). “Unfortunately, the ACA does little to alleviate these problems five years into its implementation, and in most cases contributes to the ongoing frustrations small employers face in offering health insurance.”
Small business owners have “encountered repeated delays and confusion over major components of the law,” she noted, such as ongoing problems and compliance burdens associated with the Small Business Health Options Program (commonly referred to as SHOP exchanges), the small business health insurance tax credit, and the employer mandate.
While most small employers believe they are generally familiar with the health care law, Wade said, “many are still discovering new ways in which the law impacts them.” For instance, the ACA prohibits employers from reimbursing employees to help them pay for individually purchased insurance plans. However, Wade cited a recent NFIB survey that found “about 18 percent of small employers offered this benefit last year and are now in violation of the law. NFIB continues to receive calls from owners, generally after having talked to their CPA or insurance agent, confused about the new rules prohibiting the practice and the subsequent harsh penalties,” she noted.
The ACA’s “potential benefits for small employers have not materialized five years into enactment,” Wade concluded.
A far sunnier view of the statute and its effects was presented by David Blumenthal, M.D., president of The Commonwealth Fund, a private foundation that promotes access to affordable health care. “At the five-year mark, there is strong evidence that the Affordable Care Act has resulted in gains in coverage, affordability and access to health care services,” he testified.
The law is benefitting people in employer-based plans and “freeing people from ‘job lock,’ ” Blumenthal contended. He cited research by the Congressional Budget Office (CBO) projecting that the ACA will reduce employees’ hours worked by 1.5 percent to 2 percent over the period 2014 to 2017, translating into a decline in full-time-equivalent workers of 2 million in 2017, and declining further to 2.5 million in 2024.
“The CBO believes this reduction will occur almost entirely because workers will choose to work less as a result of the law’s new coverage options,” Blumenthal said. “For example, workers who have been locked into their jobs because of the need for health insurance may now chose to retire early, stay home or work part time to care for children or elderly parents, or earn a college degree.”
Moreover, “The 160 million people with health coverage through an employer are also benefitting from new protections, like the ability to stay on a parent’s health plan through age 25, and preventive-care coverage without cost-sharing,” he added. “And despite these changes, premium growth in employer-based plans slowed in the majority of states since 2010,” when these provisions went into effect.
“Five years, however, is a short time in the life of legislation as ambitious and sweeping as the ACA,” Blumenthal concluded. “Additional studies and evaluations will be needed to paint a fuller picture of its impact on Americans and their health care system.”
On that last point, both advocates and opponents should be able to agree.
Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter @SHRMsmiller.
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