Naomi Lopez Bauman Aug. 28, 2014, 9:01am

For months, data suggesting that the Affordable Care Act, or ACA, is hurting employment have been dismissed by the White House as anecdotal. But a recent survey of businesses conducted by the Federal Reserve Bank of Philadelphia seems to provide undeniable proof that the law is forcing businesses to fire employees and cut health benefits.

According to the report:

“Over 18 percent of the firms indicated that the number of workers they employ was lower because of the ACA; 3 percent indicated higher levels.  The same percentage (18 percent) indicated that the proportion of part‐time workers had increased.”

That almost one in five employers had reduced employment is significant. The survey also found that about one-half of employers had changed their health insurance offerings as a result of the law. And a vast majority of those affected were forced to pay higher premiums. The report continues:

“Regarding health insurance benefit coverage, 41 percent said their coverage was unchanged, but 52 percent indicated modifications to their offerings.  Among those modifying their health insurance coverage, higher deductibles (91 percent), higher worker contributed premiums (88 percent), and higher out‐of‐pocket maximums (77 percent) were the most cited changes.”

Under the law’s employer mandate, employers with 50 or more full-time employees or full-time equivalents are required to offer “qualified and affordable” health insurance coverage to their employees. This provision of the law was supposed to go into effect Jan. 1, 2014, but was delayed this past summer for one year by the Obama administration and was recently delayed again for another year for those employers with 50-99 full-time or full-time equivalent employees.

The mandate seems to be hurting employers and employees alike.

Since September of last year, the Illinois Policy Institute has been documenting the loss of hours that could be the result of the new law.

Between 2011 and 2013, Illinois lost the equivalent of about 63,000 jobs in the retail trade, food and beverage, and general merchandise industries combined through reduced work hours. That is about the total number of jobs added in all sectors in the state over the past year.

All three of those sectors, comprising about one-fifth of the state’s total employment, now have average work hours below 30 hours per week; how the new law defines full-time employment.

Mounting evidence shows the costs of the health-insurance overhaul extend well beyond increased premiums and policy cancellations. It is difficult to ignore the effects that the law is now having on businesses and their workers.

It’s time to go back to the drawing board to craft solutions that address health-care costs and give individuals control, rather than giving federal bureaucrats more authority over health-care decisions. Allowing citizens to select options that best meet their own needs and preferences, rather than government-knows-best dictates, should be the primary means by which to restore affordability to the nation’s health-care system.

Naomi Lopez-Bauman is Directory of Health Policy for the Illinois Policy Institute. 

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Illinois Policy Institute
190 S La salle St
Chicago, IL 60603

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