The Affordable Care Act and its effect on employers

February 12, 2015

A person writing on paper with a silver pen.

The Patient Protection and Affordable Care Act of 2010 (ACA) is designed to expand coverage to millions of Americans, yet the ACA largely preserves the system of health insurance sponsored by employers that covers a majority of Americans.

Nevertheless, the ACA includes several provisions that directly affect employers and can influence their decisions about whether to offer coverage. Before many of the ACA’s provisions began in 2014, CHRT published separate issue briefs examining the key provisions for small employers, along with those affecting midsize and large employers. In addition, CHRT has published briefs on ACA taxes, premiums, and cost-sharing for employers and their workers.

This brief will summarize recent trends in employer-sponsored coverage and provide an update on certain key provisions that have faced implementation challenges. Several provisions of relevance to employers have faced significant delays or changes as the ACA has been implemented.

Although the prevalence of employer coverage has declined over the last decade, the majority of Michigan residents still rely on their employer for health insurance. As of 2013, 60 percent of residents received ESI coverage, down from 65 percent in 2008. Small firms still comprise the vast majority of private-sector employers in Michigan, as almost three out of every four employers have fewer than 50 employees. While large firms with 1,000 or more employees only represent 13 percent of total firms, they employ nearly 45 percent of Michigan workers.


[Editor’s note: This brief was updated to clarify the differences between business establishments and firms.]