Research measures impact of Affordable Care Act

A quarter of small businesses that offered health insurance in 2014 are no longer planning on offering coverage, according to a report by a Grand Valley State University researcher. Only half of small firms currently offering insurance will continue to offer it in 2016.

Leslie Muller, assistant professor of economics, in collaboration with Priority Health, surveyed area employers with fewer than 50 full-time employees about the impact of the Affordable Care Act on local businesses in West and Southwest Michigan.

“While, for the most part, larger employers are continuing to offer health insurance to their employees, many small employers are choosing to discontinue coverage,” said Muller. “Just under three quarters of the surveyed companies who are discontinuing coverage in 2015 are going to encourage their employees to use the ACA public exchanges.”

The public exchanges in Michigan opened in October 2013 and offer a place for individuals to purchase health insurance.

See results below.

OVERALL
• Only a quarter of small firms that offered health insurance in 2013 and 2014 plan on continuing to offer plans in 2015 and 2016.
• Of those offering plans in 2014, three quarters plan on offering insurance in 2015. Half of these small firms plan on also offering plans in 2016.
• Sixteen percent of small firms are uncertain as to whether they will offer insurance in 2015; 28% are unsure about 2016.  
• Of those companies not offering plans in 2015, 68% plan on encouraging employees to use the public exchange to buy insurance.

CHANGES TO HEALTH PLANS
• 87% of small firms have already or are considering increasing the share of insurance costs borne by the worker.
• 73% have or are considering shifting costs by using a high deductible plan.
• 67% have or are considering shifting costs using changes to prescription drug coverage.

CHANGES TO HIRING
• 46% of small firms have or are considering limiting or reducing new hiring.
• 28% have or are considering reducing their overall workforce.

For more information, contact Leslie Muller at (202) 441-2212 or [email protected].