Firms See Minimal Impact From ACA Mandate

Eighty-three percent of employers says the Obamacare mandate to provide health insurance will have little to no impact on hiring.
Matthew HellerApril 29, 2015
Firms See Minimal Impact From ACA Mandate

A new survey suggests that concerns about the economic impact of the Affordable Care Act on U.S. businesses may have been overblown.

The ACA’s “employer mandate” requires that all businesses with 50 or more full-time equivalent employees provide health insurance to at least 95% of their full-time employees and dependents up to age 26, or pay a fee. It becomes effective for larger firms this year and for small businesses in 2016.

Critics of the law have forecast that the mandate will have a dampening effect on business. But in a survey of 170 finance professionals conducted by the Institute of Management Accountants, 83% of the respondents said they expected it to have little to no impact on their hiring plans in the coming year.

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Of the 17% that said there would be a negative impact on the number of employees, 7% said the negative impact on the number of employees would be no more than 2%, and only 3% said the impact would be greater than 10%.

“While the Affordable Care Act continues to be a very controversial piece of legislation, we find that strong concerns about higher unemployment due to the ACA do not seem to be warranted,” the survey concludes.

Other findings from the poll indicate that U.S. firms have a more sanguine view of Obamacare than might be expected. Overall, 90% of respondents said uncertainty about the ACA would have little to no effect on their company’s plans to implement a new project or product. Where there is uncertainty, it largely is affecting smaller firms, with none of the respondents at firms with more than 500 employees reporting an effect.

As far as profitability, 57% of respondents expect some negative effect from the ACA, with 38% predicting no effect and 5% actually expecting the law to increase profitability.

Forty-five percent expect the decrease in profitability will be no more than 5%. That could reflect plans to shift the extra burden of Obamacare employees to customers or to cut other spending, the IMA said.