Study: Employers unlikely to drop healthcare from Affordable Care Act

The Affordable Care Act is unlikely to push employers to drop health insurance coverage and should give small firms a competitive advantage, a U.S. expert says. Helen Levy -- a research associate professor with the University of Michigan Institute for Social Research, Ford School of Public Policy and School of Public Health -- said there's much concern that employers may drop health insurance coverage, but most research suggests that's not a major cause for concern. In the race for the best workers, small firms have always been at a bit of a competitive disadvantage when it comes to benefits they can offer, Levy said. "That's going to be less of an issue now that workers will have the option of getting coverage from someone other than an employer," Levy said in a statement. "And we expect that to improve the quality of the worker job matches that are seen in the labor market, and that is good for everyone." Part-time workers may have less coverage from employers but they have access to exchanges, Levy said. "But in many cases, that is going to be a better deal for them because they can get access to a tax credit in the exchange that they wouldn't have been able to access if they continued to have employer-sponsored coverage," Levy said. By 2018, when the Affordable Care Act's health insurance exchanges are fully up and running, an estimated 20 million people who purchase private health insurance through an exchange will receive a premium tax credit, costing the U.S.Treasury around $92 billion that year, Levy said. That's in comparison to the $260 billion annual cost to the federal government of not collecting income tax on health insurance provided as a fringe benefit of employment, Levy said. "Five years from now we are going have a functioning health insurance exchange system," Levy said. "I think it is going to be a valuable option for people and I think we are going to say, 'I can't believe it was ever not this way.'"