Republicans have long sought to portray the employer responsibility requirement in the Affordable Care Act as a “job killing” measure that would undermine economic growth and encourage businesses to drop coverage. Massachusetts governor Mitt Romney — whose 2006 health care law levies a modest fee on businesses that fail to provide insurance — publicly opposes the requirement and vetoed the provision in his state law before it was reinstated by the Massachusetts legislature.

But according to Boston Globe reporters Michael Kranish and Scott Helman, Romney had initially signaled that he could live with an employer requirement as part of a compromise between the Massachusetts House and Senate to avoid levying a payroll tax on businesses that would have helped finance the expansion of coverage. In fact, state lawmakers said they felt sandbagged by Romney’s ultimate decision to veto the measure:

Asked if there were any partys of the bill he would veto, he said he still needed to review it all but, “We are where we’d hoped we’d be.” Didn’t he consider the penalty on employers a tax, as antitax activists did? And hadn’t he pledged to veto any taxes? “It’s not a tax hike,” Romney responded. “It’s a fee. It’s an assessment.” Businesses and workers who purchased health insurance already paid an assessment to help fund the “free care” pool, he noted, and “it makes sense to expand this assessment.” [...]

Toward the end, he was asked again: was he really okay with the new employer penalty? Romney said he was relieved that what he had feared most—a new, broad-based payroll tax on employers—was not in the plan. That was something, he said, that he “definitely would have been unable to sign.” “This,” he continued, “is of a different nature.”

Romney eventually described the fee as “unnecessary and probably counterproductive,” but employer coverage has generally increased in Massachusetts, as more private employers are now offering coverage than did before reform was enacted.

Sarah Kliff has this very interesting piece arguing that employers who dump coverage as a result of the Affordable Care Act may increase health care costs for their employees, many of whom would have to pay more for insurance in the new exchanges:

For the employer, dropping coverage is a pretty decent deal: A company would see its health care costs reduced by over 40 percent. They don’t drop to zero, however, since the employer would still be on the hook for the fines that come along with not offering coverage.

But for the employee, it’s a pretty lousy deal. Lockton ran the numbers, using data on how much employers pay for health insurance now and how much health insurance on the exchanges is projected to cost.They found that employers foot a significantly larger chunk of the insurance bill than the federal government would, even with the new subsidies they’d receive. The firm predicts their premiums would increase anywhere from 79 to 125 percent if they lose employer coverage and have to go to the exchange. There’s such a big variation because exchange subsidies vary by income: Those who earn less are eligible for a larger subsidy.

Look at the blue section:

So what does this tell us about how employers will react and whether they’ll be more or less likely to drop health insurance coverage? Well, I’d argue that employers are far less likely to do something that leaves their employees — particularly their most valuable better-paid employees — worse off, particularly since the talent can walk across the street to a competitor’s firm. In fact, even if employers were to offset some of the increases with higher wages, the employees would have to pay taxes on those amounts and would still experience a net loss.

Yet another survey, this one from GfK Custom Research North America, finds that employers are unlikely to stop offering health care coverage as a result of the Affordable Care Act. Only 12 percent of businesses surveyed said they would consider dropping insurance:

Even in an environment of uncertainty about the future of health care reform, a majority of employers surveyed (56 percent) say that they are likely to continue to offer employer-sponsored health insurance after health care reform is enacted,… Only 12 percent of benefits decision-makers say they would be very or somewhat likely to drop coverage, and another 32 percent of the 502 private-sector companies surveyed are unsure what they will do.

Projections vary by the size of employer, with only four percent of decision-makers surveyed from those companies with 500 or more employees considering terminating coverage completely. In addition, decision-makers who say they are familiar with health care reform are less likely to foresee their dropping coverage (7 percent, versus 15 percent among those not familiar).

While 87 percent of company health care decision-makers said that increasing costs could force their companies to reconsider offering insurance, “nearly as many, 82 percent, say the effect on employee morale will be important” — suggesting that businesses may think twice about ending coverage if the decision would turn off highly valued employees and send them running into the hands of the competition. (Incidentally, those workers “receive better benefits and, through the tax system, better subsidies through employer provided coverage than through newly created insurance exchanges.”)