Four years into the ACA

10 Nov

Insurance is a major topic for human resources executives.

It's been about four years since the Affordable Care Act was signed into law, changing the way companies do their insurance. Although the open market enrollment system was buggy at first, the real question is whether the ACA has brought adequate health insurance to the people who have needed it most.

According to the New York Times, the number of people who have been insured has increased, and the insurance has largely been affordable for most Americans. Additionally, the health industry has been helped by the laws, which provide new patients and customers. Health care spending has not diminished appreciably.

The Wall Street Journal argued that costs have increased for U.S. citizens and insurance companies alike. Additionally, many businesses have begun to reduce their hiring of full-time workers – sometimes pulling people back from full-time hours – to ensure that they won't need to pay the extra money for insurance once the law reaches its next phase, in which those with 50-99 full-time employees will have to provide coverage or face penalties.

How the ACA affects companies' bottom lines
The University of South Carolina's Darla Moore School of Business recently did a study on medium and large U.S. companies, and found that 78 percent reported a rise in health care costs, Human Resources Executive Online reported. Thirty-seven percent reported their labor costs increased by about 5.6 percent on average.

Many companies have switched to consumer-directed health plans. Other businesses have saved money by cutting back on the people they offer health insurance to. Wal-Mart will stop providing health insurance to the people who work under 30 hours a week, beginning Jan. 1, 2015. Target and Home Depot will be doing the same thing.

Patrick Wright, who headed the survey, believes companies will cease employer-sponsored health insurance in the same way that companies no longer give their workers defined-benefit pensions.

While health insurance has risen in price as it does every year, the cost increases have been smaller than average, usually 3 percent for families and 2 percent for singles. Having said that, many health insurance companies have adopted large deductibles to keep costs down.

What companies can do
The ultimate fate of a business's health insurance depends on many variables. For some managers making choices about human resources solutions, Some employers are even choosing to pay the penalties for not providing an affordable health care option, versus subsidizing for the health care of every employee.

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