Implications of Health CareReform for Employers
An Analysis o the Patient Protection and AordableCare Act
Kosali Simon May 2010
Contents
1 Introduction and summary4 New market dynamics and new decisions for employers6 An employer mandate9 Subsidies to small employers11 An individual mandate12 Insurance market reforms14 Expansions of public coverage15 Medicare payment reforms and other improvements indelivery system quality and efficiency18 Conclusion19 Appendix A: The current role of employers in providing health insurance26 Appendix B—How do employers react to increasing healthcare/health insurance costs?30 Appendix C—What do employers say when asked about their opinions regarding health insurance and reform?32 Appendix D33 Endnotes36 About the author and acknowledgements
1Center or American Progress | Implications o Health Care Reorm or Employers
Introduction and summary
Te recen enacmen o comprehensive healh care reorm has many implicaionsor American employers and heir workers.
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Bu how hey are aeced by he PaienProecion and Aordable Care Ac and he companion Healh Care and Educaioneconciliaion Ac, or, ogeher, he Aordable Care Ac, will depend on acors such ashe size o he employer, amily incomes, and healh condiions o he workers.More han 160 million (61 percen) o nonelderly Americans have an employmen-relaedhealh insurance policy in 2008.
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In general, employers are expeced o coninue provid-ing healh insurance or a large racion o he nonelderly ollowing healh care reorm.Some small employers will qualiy or emporary subsidies, and large employers ace nesdesigned o encourage employers o say in he game. I individuals are no insured, henhey ace nes ha add o he incenives aimed a employers. Oher provisions, noably expanded Medicaid eligibiliy and he availabiliy o low-income premium and cos-shar-ing subsidies or hose no oered employer coverage, may lead some employers wih low-skilled workers o drop healh insurance provision, bu or he large majoriy o employers,he reorms are likely o mainain heir key role.More specically, key eaures o he enaced nal healh care reorm legislaion include:
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Te creaion o sae healh insurance exchanges wih amily income-based premiumsubsidies (no available i oered employer insurance)
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A requiremen ha large employers who do no provide healh insurance (or hoseproviding healh insurance whose workers receive subsidies in he exchange coverage)pay a penaly on behal o heir workers; small employers who oer coverage receive aemporary subsidy
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A requiremen ha individuals hold insurance coverage—eiher hrough a public pro-gram, hrough an employer, or purchased hrough he exchange—or pay a penaly
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Insurance marke reorms, including near-communiy raing, guaraneed issue, andminimum sandards or healh insurance plans
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Expanded eligibiliy o public coverage or all Americans wih incomes under 133 perceno he povery level, or somewha less han $30,000 a year or aduls in a amily o our
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Implications of Health Care Reform for Employers
An analysis of the Patient Protection and Affordable Care Act and what it means for American businesses.
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