NCPA - National Center for Policy Analysis

Job-Based Health Coverage to Become Even More Expensive under Affordable Care Act

May 2, 2012

In a new report prepared for Ways and Means Committee Chairman Dave Camp (R-Mich.), data from America's Fortune 100 companies show they could save hundreds of millions of dollars a year under the new health care law by simply terminating health insurance for their workers and dumping these employees into taxpayer-funded health care exchanges.

  • More than 70 percent of America's Fortune 100 companies detailed their health care costs for the Committee, providing the ability to analyze how those self-reported costs would compare to ending employer-sponsored insurance and paying the employer mandate penalty.
  • Based on an aggregation of the data received, if the 71 Fortune 100 companies that replied to the survey ceased to offer health care coverage and paid the $2,000 per full-time employee penalty, they could save a total of $28.6 billion in 2014 (an average savings of over $400 million per company) and $422.4 billion from 2014-2023 (an average savings of nearly $6 billion per company).
  • From 2014 through 2023, the average employer responding to the survey could save $5.9 billion if they dropped coverage in favor of paying the mandate penalty.
  • Eliminating the plans would impact more than 10.2 million employees and dependents covered by those plans.

Despite promises that the law would control health care costs, employers have overwhelmingly concluded increases in cost will accelerate in the years after the Democrats' health care law is fully implemented.  Alarmingly, 84 percent of responding employers expect their future health care costs will increase at rates that are greater than those they've experienced over the past five years.  During this period, employers responded that their health insurance costs have increased 5.9 percent, on average, while they expect future health costs will grow 7.6 percent, on average.

Source: "New Report Reveals Democrats' Health Care Law Creates Financial Incentives for Employers to Drop Health Coverage," House Ways and Means Committee, May 1, 2012.  "BROKEN PROMISE: Why ObamaCare Will Force Americans to Lose the Health Care Coverage They Have and Like," House Ways and Means Committee, May 1, 2012.

For text:

For study:


Browse more articles on Health Issues