ObamaCare and Employers

Yesterday I looked at how the 2010 health care law might discourage employers from hiring. Today, Scott Gottlieb of The American Enterprise Institute notes a new report on how ObamaCare will affect employers. The Willis Group surveyed over 2,300 employers about what they expect from the law. The group ffound that a lot of employers are taking a wait and see approach, and are still uncertain about how the law will affect them. But there are already some signals of how the law will affect businesses. Gottlieb picked out a few key points:

– Employers report that their healthcare costs have increased by about 2-5%—mainly due to new mandates in the new health law such as requirements that young adults can continue coverage under their parents' policies, first dollar coverage of routine services, and the removal of annual lifetime limits for "essential health benefits."

– More than half of the employer respondents expect to pass on these ACA-endowed rising costs to employees.

– Moreover, fewer than 30% of employers say they were able to maintain grandfathered status of their healthcare plans. This rapid loss of grandfathered status far outpaces Obamacare's original estimates of what would happen. The preamble to the June 2010 regulations noted that by the end of 2011, the Obama administration expected 78% of employers would retain grandfathered status. By the end of 2012, they forecast that 62% would still be grandfathered, and by the end of 2013, 49% would retain their grandfathered status.

The new report states: "The accelerated loss of grandfathered status suggests that employers have had to make many plan changes to offset cost increases, and perhaps employers have been more willing to give up grandfathered status in order to take other steps to control costs."