The Potential Effects of Federal Health Insurance Reforms on Employment Arrangements and Compensation

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in ABSTRACTThe Affordable Care Act (ACA) presents an opportunity to significantly improve compensation for American workers. A potential concern, though, is that employers will circumvent the employer mandate by increasing their use of workers in staffing arrangements that are not covered by the mandate: workers averaging less than 30 hours per week, working on a temporary basis, or working in organizations with fewer than 50 full-time employees. In this paper, we shed light on the likely effects that the ACA will have on employment arrangements. We first examine how part-time employment in Massachusetts changed after its health insurance reform, which is similar to the ACA in many ways. We find, contrary to prior research, that the Massachusetts reform resulted in modest increases in part-time employment among low-educated workers. We then identify the characteristics of employers and employees most affected by the ACA's employer mandate. For the period 2010 to 2012, we estimate that workers who were not offered health insurance at their workplaces but whose employers would be required to offer health insurance under the ACA made up about 5 percent of the workforce and that reducing average weekly hours worked may be relatively straightforward for employers in industries with the largest concentrations of these workers (e.g., retail trade and accommodation and food services). We also point to recent industry patterns of involuntary part-time employment and temporary help use that are consistent with these potential effects of the employer mandate.JEL Codes: I13, J3

Effects of the Affordable Care Act on Part-Time Employment: Early Evidence

“…Using 2008-2010 data from the March CPS, which contains information on coverage by an own-employer plan, as well as statistics on insurance take-up rates by industry, we estimate that only about 5 percent of the wage and salary workforce is covered by the mandate but not already offered health insurance by their employers (Dillender, Heinrich, and Houseman 2015). While these estimates are rough, they nevertheless indicate that the share of the workforce that is vulnerable to a reduction in hours or other change in staffing arrangement is relatively small.…”

“…Use of temporary-help employment in manufacturing, however, is high. Although it is beyond the scope of this paper, the rise of temporary-help employment since the Great Recession could partly reflect a response to the ACA (Dillender, Heinrich, and Houseman (2015).…”

“…The latter should best capture any changes owing to an increase in employer demand for short-hours parttime employment. We previously estimated that around the time of the ACA's passage, about 5 percent of the wage and salary workers were vulnerable to changes in their employment arrangement and argued that, if employers chose to circumvent the mandate, the mechanisms would likely vary across industries according to the organization of production and established staffing practices (Dillender, Heinrich, and Houseman 2015). The relatively small share of the workforce potentially affected by the mandate implies that any impacts on hours may be difficult to detect empirically outside of industries with a high share of such workers and in which use of low-hours part-time workers is an attractive alternative.…”

Effects of the Affordable Care Act on Part-Time Employment: Early Evidence

“…14 A number of observers have noted that, although it has fallen during the recovery period, the rate of involuntary part-time employment has remained higher than would be expected given the state of the macroeconomy, suggesting that structural factors help to explain why it has a higher incidence today than before the recession (e.g., Valletta and van der List 2015). In addition, higher-than-normal involuntary part-time employment has been concentrated in sectors with high baseline rates of part-time employment (Dillender, Heinrich, and Houseman 2015;Robertson and Terry 2014).…”

“…First, prior to the mandate taking effect, these sectors accounted for a large and disproportionate share of workers who would be covered by the mandate but who were not offered health insurance. Although they accounted for only 20 percent of wage and salary employment, they accounted for an estimated 42 percent of workers vulnerable to a change in staffing arrangements (Dillender, Heinrich, and Houseman 2015).…”