Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...
July 28 — Small businesses have been pumping the brakes on offering health benefits to their employees since 2009, according to new data from the Employee Benefit Research Institute.
“The fact is that small employers were less likely to offer these benefits to begin with,” Paul Fronstin, EBRI's director of health research and education program and author of the report, told Bloomberg BNA July 28. “While the ACA was designed to try to get more small employers to” offer health insurance, “it hasn’t.”
The proportion of employers offering health benefits fell between 2008 and 2015 for all three categories of small employer, EBRI found: by 36 percent for those with fewer than 10 employees, by 26 percent for those with 10 to 24 workers and by 10 percent for those with 25 to 99 workers.
Some of the possible reasons for the decline include actual and expected health-care cost increases and an increased availability of insurance through the Affordable Care Act's health insurance marketplace, said the report, released July 28.
There was concern before the ACA passed that all employers would rush to drop coverage, but the opposite proved to be true for some large employers, Mike Thompson, president and chief executive officer of the National Business Coalition on Health, told Bloomberg BNA on July 28.
But the “economics” of offering health coverage are different for small employers, he said.
“Their employees have better access to coverage on their own than they did before ACA,” Thompson said. In addition, employers with fewer than 50 employees aren't subject to the law's employer shared-responsibility provisions, meaning there aren't many roadblocks to discontinuing offering coverage, he said. Under those provisions, also known as the employer mandate, larger employers must offer coverage that meets ACA affordability and minimum-value coverage standards or potentially face penalties.
There is also the possibility that employees of small businesses will have access to subsidies if they get health coverage through the marketplaces. All of that added together means that small employers might feel more comfortable letting their employees obtain their own coverage, he said.
Larger employers are still offering health benefits at largely the same rate as before the ACA. More than 95 percent of those with 100 or more employees offered health coverage before the enactment of the law and continue to do so, EBRI said.
“There’s been no abandonment by large employers. If anything, it’s the opposite. They’ve really tried to dig in and invest more on this,” Fronstin said.
Still, under the right conditions, large employers also might rethink their offerings, he said.
“If there’s a recession, all bets are off. It’s never been put to the test. There’s never been a recession during a time period when there was an alternative to employment-based coverage,” Fronstin said.
Steve Wojcik, vice president of public policy at the National Business Group on Health, had a different take. He told Bloomberg BNA on July 28 that employer confidence that they will still be providing health coverage to employees in 10 years has increased.
If there were to be another economic downturn, Wojcik said, there could be a decrease in coverage, but he doesn't think it would be because employers stop offering the benefit.
“I think employers would continue offering coverage because it's valued,” but they might look at different ways to reduce costs or change the benefits they offer, Wojcik said.
To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jo-el J. Meyer at email@example.com
The EBRI report is at https://www.ebri.org/pdf/notespdf/EBRI_Notes_07-No8-July16.Small-ERs.pdf.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)