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ACA Will Raise Costs for Mid-Sized Employers

From the National Business Coalition on Health:  President Obama's healthcare law won't erode employer-based health insurance — but it will raise some companies' costs by nearly 10 percent, according to a new analysis from the Urban Institute.

Although the law's critics usually focus on small businesses, the new paper says medium-sized firms will see the biggest cost increase. Mid-sized businesses — firms that have between 101 and 1,000 employees — would have seen a 9.5 percent jump in their total healthcare costs if the Affordable Care Act had been fully in place this year, the paper says. (Many of the law's key provisions don't take effect until 2014.)

Small businesses would have seen their costs fall by 1.4 percent. Firms with more than 1,000 workers would have seen a 4.3 percent increase.

The report confirms one central criticism of the healthcare law — that it will increase employers' costs — while also undercutting charges that the law will lead employers to quit offering healthcare coverage. Overall, about 4 million more employees would have had healthcare coverage if the ACA had been in place this year, the Urban Institute found.

Small businesses are central to many criticisms of the law. The National Federation of Independent Business was part of the lawsuit decided by the Supreme Court this summer, and Republican lawmakers argue that the law's new mandates will crush small employers. But according to the Urban Institute analysis, tax credits and purchasing efficiencies will help small businesses. New mandates, though, will make coverage more expensive for mid-size and large employers.

Posted by Cristie Travis at 8:08 AM

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