Small-Group Health Enrollment Stable Despite ACA

The Affordable Care Act (ACA) did not cause small employers to stop offering health coverage, a new analysis shows. The rate at which small businesses offered employer-sponsored health insurance (ESI) coverage to employees stabilized from 2013 to 2020, contrasting some early predictions that the ACA would curb participation in ESI among some groups.

The analysis, funded by the Robert Wood Johnson Foundation and prepared by researchers at the Urban Institute, finds:

• Health insurance enrollment in the small-group marketplace held stable from 2013 to 2019, hovering between 8.9 and 9.6 million enrollees. 
  • In 2020, the number of enrollees dipped to 7.9 million–likely a result of decreases in employment due to the COVID-19 pandemic.  
• The rate at which small employers offered health insurance decreased by just 2.6 percentage points from 2013 to 2020–a marked improvement from the 10.6 percentage point decline from 2002 to 2012.  
  • The slight decrease in coverage offerings by small employers mirrors what was observed among large firms during the same time period.  
• Year-over-year premium growth in the ESI market was similar across companies of all sizes. 

“These findings show consistent demand for employer-sponsored coverage from small-firm employees and greater stability in health insurance costs resulting from ACA reforms,” said Jessica Banthin, senior fellow at the Urban Institute. “The small-group market continues to serve as an important source of health insurance for many workers.

“Despite many predictions to the contrary, the small group market has remained basically stable,” said Kathy Hempstead, senior policy adviser at the Robert Wood Johnson Foundation. “It remains to be seen whether the economic disruption associated with the pandemic will lead to any significant changes in this segment of the market.”

The full analysis is available here.