The Affordable Care Act is not as bad for businesses as some had feared.
More large companies are offering health care benefits, and the number of small companies planning to ditch coverage and send their employees to state-run exchanges for health plans keeps shrinking, according to The New York Times. The paper reported Tuesday that employers are deciding to keep health care benefits as a way to attract employees in the face of a tightening labor market, and because the cost of coverage is not as steep as they had expected.
About 155 million people will have employer-based coverage in the U.S. in 2016, according to the Congressional Budget Office. That number is expected to dip to 152 million by 2019, and stay at that level through 2026.
Nearly 70 percent of companies with 200 employees or fewer offered health plans in 2010, compared with 57 percent last year, a Kaiser Family Foundation survey finds. But that downshifting may be changing. According to a survey from benefits consultancy Mercer, in 2013, 20 percent of businesses with 500 or fewer employees said they planned to drop coverage in the next five years. In 2016, the Times reports, that figure decreased to 7 percent.
Since 2010, tax breaks for small businesses have helped them offer plans. And for the smallest businesses that can't afford coverage, the exchanges have been an important tool for employees, as Inc. reported last week.
As of January 1, the ACA requires businesses with 50 employees or more to offer qualified health care plans, or face tax penalties. Such plans must meet minimum levels of care as set out by the federal government, and they can't exclude customers for pre-existing conditions.
For 2015, the average premium for employer-sponsored family coverage among firms with fewer than 200 employees increased 5 percent to $16,625 compared with the prior year, according to Kaiser.