No way out for employers on health benefits

by J.K. Wall

Source: Indianapolis Business Journal

When the Affordable Care Act was passed five years ago, many employers thought it would give them a way out of offering health benefits.

But they were sorely mistaken.

Last week’s Supreme Court ruling upholding the tax credits for Obamacare is just the latest in a string of developments that have kept employers from ditching their group health plans, as many predicted they would.

In fact, just the opposite has occurred.

A study by the RAND Corp. released last month found that employers accounted for the biggest single chunk of the growth in health insurance from September 2013 to February 2015—adding 9.6 million people to their health plans.

Obamacare’s expansion of Medicaid added 6.5 million during that time, while the Obamacare exchanges added 4.1 million.

“What the RAND study really shows is that employer-based benefits have been restored as jobs have started to come back,” wrote John Graham, a senior fellow at the conservative National Center for Policy Analysis, in a blog post.

Alternative views are that Obamacare’s employer mandate penalties pushed more companies to offer benefits and that Obamacare’s individual mandate “tax” pushed more individuals to join their employer’s health plan than before.

Now, the survival of Obamacare’s tax credits means employers are still on the hook to pay Obamacare’s employer mandate penalties if they don’t offer affordable, adequate health insurance to their full-time employees. That’s because those penalties against employers only get triggered if one of their workers bought insurance on an exchange and received a tax credit.