Robert Wood Johnson Foundation: Health Reform Will Increase Coverage Rates For Small Employers

In case you’re interested in actual economic projects of how the Affordable Care Act will affect the employer health insurance market, the Robert Wood Johnson foundation has just released a report showing that while there “has been a significant erosion in employer-sponsored insurance (ESI) over the last decade,” health care reform “is expected to help reverse the trend among small employers”:

Using Urban’s Health Insurance Policy Simulation Model, researchers estimated that insurance offer rates for all firms with fewer than 100 employees would increase by 9.7 percent under ACA, from a projected 43.4 percent to 47.6 percent. The biggest jump would be seen in the smallest firms, with a projected increase in offer rates of 14.2 percent among businesses with fewer than 10 employees. When combined with a projected drop in premium costs, the report indicates that ESI coverage will increase modestly for workers employed by firms with fewer than 50 employees, as well as for their dependents.


As RWJ explains, “In general, the smallest employers will see significant benefits from the ACA. They will be able to access more affordable coverage in the SHOP exchanges, and some will be able to use tax credits to aid in purchasing coverage.” The implications for larger companies will be far more modest, but there is some evidence that the ACA may stabilize the market and help slow down coverage erosion. Read the full study here.