The adoption of the Affordable Care Act (ACA) brought many concerns that the reform would negatively impact employer-sponsored health insurance by either encouraging employers to revoke coverage or raising prices for employers. However, this report from the Urban Institute found that the effects on employer-sponsored health insurance will likely be small and may even be positive.

From the report:

Since the enactment of the Patient Protection and Affordable Care Act (ACA) in March 2010, some have argued that health reform would erode employer-sponsored insurance (ESI) by providing incentives for employers to stop offering coverage. Others have claimed that most businesses would face increased costs as a result of reform, or even that the uncertainties surrounding the impact of health reform is hampering the economic recovery. This paper finds that the effects on employer coverage and employer health care spending would actually be small.

Using the Urban Institute’s Health Insurance Policy Simulation Model (HIPSM), we estimate how the Affordable Care Act would affect employer-sponsored insurance (ESI) and employer health care costs. To investigate the effects of health reform on ESI, we simulate the ACA as if fully implemented in 2010 and contrast the results with the pre-reform HIPSM baseline results for 2010. We also present HIPSM estimates on how ESI coverage would have changed over time without health reform, given changes in economic conditions and long-term health care cost growth. We divide employers into three groups: small firms with 100 or fewer workers, medium firms with 101 to 1,000 workers, and large firms with more than 1,000 workers.

Full Article: Employer-Sponsored Insurance Under Health Reform: Reports of Its Demise Are Premature (PDF | 272 KB)

Urban Institute. (2011). Employer-sponsored insurance under health reform: reports of its demise are premature. Garrett, B. and Buettgens, M.