Dive Brief:
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Predictions the Affordable Care Act would prompt employers to drop employee health coverage have so far proven incorrect.
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The majority of companies that previously provided health coverage -- especially large ones -- have continued to do so for the sake of recruitment and retention during the tightening of the labor market over the past several years, reports The New York Times.
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This stability of employer coverage has been a surprise and has shown, some experts say, that the ACA has left the core of our former health insurance system intact while managing to extend coverage to millions who previously had no options.
Dive Insight:
What also matters is why employer-based coverage is currently so stable and why that could change.
It has turned out that for large employers, it continues to pay to provide coverage because doing so comes with a tax break and because they would otherwise be penalized about $2,000 per employee. In addition, thanks to the strong labor market, employers would be expected to offer additional compensation in lieu of the lost benefits. For smaller employers, the decisions vary.
The status quo could change, however, if the labor market weakers or if healthcare costs spike, and it is no longer so advantageous to employers to continue their coverage.
The Congressional Budget Office estimated last month that the number of people with employer-based coverage will drop from about 155 million now to about 152 million in 2019, and stay stable through 2026.