Small Group Health Enrollment Stable Despite ACA

The Affordable Care Act (ACA) hasn’t caused small employers to stop offering health coverage, according to a new analysis. The rate at which small businesses offered employer-sponsored health insurance (ESI) coverage to employees leveled off from 2013 to 2020, contrary to some early predictions that the ACA would limit participation in the ESI among certain groups.

The analysis, funded by the Robert Wood Johnson Foundation and prepared by researchers at the Urban Institute, reveals:

  • Health insurance enrollment in the small group market remained stable from 2013 to 2019, hovering between 8.9 and 9.6 million enrollees.
    • In 2020, the number of registrants fell to 7.9 million, likely due to declining employment due to the COVID-19 pandemic.
  • The rate at which small employers offered health insurance fell just 2.6 percentage points from 2013 to 2020, a marked improvement from the 10.6 percentage point drop from 2002 to 2012.
    • The slight decrease in offers of coverage by small employers mirrors what was observed among large companies over the same period.
  • Year-over-year premium growth in the ESI market was similar for companies of all sizes.

“These findings show a consistent demand for employer-sponsored coverage from small business employees and greater stability in health insurance costs as a result of ACA reforms,” ​​said Jessica Banthin, senior researcher at the Urban Institute. “The small group market continues to be an important source of health insurance for many workers.

“Despite many predictions to the contrary, the small group market has remained fundamentally flat,” said Kathy Hempstead, senior policy adviser at the Robert Wood Johnson Foundation. “It remains to be seen whether the economic disruption associated with the pandemic will cause any significant changes in this segment of the market.”

The full analysis is available here.


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