A Congressional Research Service (CRS) report released last week clarified confusion associated with how companies treat their part-time and seasonal workers, and how this treatment may make them eligible for employer penalties under the Affordable Care Act (ACA). The CRS report includes updated information on employer penalties, which was provided by IRS guidance released late last year. According to the ACA, employers with a minimum of 50 full-time equivalent employees must offer affordable and adequate health insurance to their employees, or run the risk of receiving significant penalties under the law. The confusion on the issue stems from the difference in calculating which businesses are subject to penalties, and the IRS guidance helps to clarify this issue by explaining the ACA's classification of a full-time employee and provisions related to seasonal workers.

The Affordable Care Act (ACA) will significantly impact how employers handle employee benefits, according to a study released today by ADP Research Institute. The intent of the paper is to provide data and insights regarding how employers can begin to take action to manage the impact of the ACA's shared responsibility requirements on financial and human capital resources. The ADP study indicates that most of the impact will revolve around the part-time workforce. The data shows that, in 2012, 23% of all employee positions were classified as part-time, but only 15% of these were eligible for benefits. Roughly two-thirds of the part-time workforce was classified as single, versus less than 50% of full-time employees. When eligible part-time employees were offered health benefits, only 53% elected coverage versus 77% of full-time employees. These and other factors are indicators of whether the employer may be subject to potential penalties once the ACA’s shared responsibility requirements take effect and how much exposure the employer might have. Because of this, composition of the workforce may shift to accommodate the influences of the ACA, according to the report. With information provided in the report, larger employers can begin determining their exposure and considering options.

About one in eight (12.8%) nonelderly Americans with employer coverage switched health plans in 2010. This number is down from one in six (17.2%) in 2003, according to a new national study by the Center for Studying Health System Change (HSC). As was true in 2003, about 5 percent of people with employer coverage switched plans in 2010 because of a job change. However, the proportion of people younger than 65 with employer coverage changing plans for other reasons fell from 12 percent in 2003 to 7.5 percent in 2010, often due to a change in employer benefit offerings. Less than 2.5 percent of workers in 2010, about the same proportion as in 2003, initiated a change in plans to reduce their health insurance costs or to get a better quality plan, such as better benefits or a more desirable provider network. According to the report, these findings suggest that consumer choice plays a relatively small role in health plan switching, with most changes resulting from job changes or changes in employers’ plan offerings. Affordable Care Act (ACA) implementation may create opportunities to increase plan choice among people with employer-sponsored coverage, particularly those in small firms, resulting in more frequent switching of health plans. However, a potential downside of more switching is less stable patient-provider relationships, such as in a medical home.

The 2012 Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care offers insights into the actions and plans of leading U.S. employers and views of what the future of employer-provided health care in the U.S. may look like this year and in the coming three years. According to the study, as health care costs continue to rise, employers are looking for ways to cut costs. While the total cost of health care is predicted to rise 5.3%, to $11,507 per employee in 2013, the growth is slowing. Many companies will keep premium increases in line with the health care cost increases. The study found that 13% of companies would increase premiums by 5% in 2013, for example.

The Government Accountability Office (GAO) released a report yesterday which reviews estimates of the impact of the Affordable Care Act (ACA) on employer-sponsored coverage. According to some researchers, the ACA's Medicaid expansion and subsidized coverage for low- and moderate-income people who buy health insurance through Exchanges beginning may discourage employers from offering coverage. However, other researchers believe that the financial penalties imposed by the ACA will actually encourage employers to offer coverage. The GAO report examines 27 studies published between January 1, 2009 and March 30, 2012 that offer estimates regarding changes in employer-sponsored health coverage as a result of the ACA.

In "An Offer You Can't Refuse: Estimating the Coverage Effects of the 2010 Affordable Care Act," the Employment Policy Institute shows that the predictions of the share of workers who will keep their current employer-sponsored insurance (ESI) are quite sensitive to two behavioral assumptions. At present, 74.29% of workers have ESI. Depending on how workers and employers react to ACA implementation, that share could increase to 78.62% or decrease to 65.89%. The first behavioral assumption is to what degree firms and their workers will alter their current contracts with respect to workers' share of the premiums. The second factor pertains to vague language of portions of the ACA. The language in doubt is whether the affordable coverage rule applies to single coverage or family coverage for workers with families.