How the ACA Impacts Employment

The Affordable Care Act has been rumored to both eliminate jobs and create them, depending on which side you’re on. Insurers might say it kills jobs in their industry, but the law did establish new opportunities for certain positions.


Additionally, the employer mandate has led to layoffs and reduced hours in many national restaurant and retail franchises, and other large corporations required by the law to cover their full-time workers. And a report by the Congressional Budget Office (CBO) pushed this conversation even further, with some perceiving it meant 2.5 million people would lose their jobs.


How drastically has ObamaCare affected the job market? The law establishes new healthcare and government positions, gives employees freedom in moving from one job to another without losing health insurance, raises operating costs for certain large companies, and reduces costs for small businesses.


The CBO Report


A February 2014 employment report from the Congressional Budget Office was followed by a Republican interpretation that the law is a job killer. A Senate campaign ad from North Carolina candidate Thom Tillis suggested 2 million jobs would be lost under the ACA, which sparked controversy over this figure.


The report suggested something more complex than simply losing or gaining jobs, however. Due the the confusion, members of the CBO were asked to testify before Congress.


When CBO Director Douglas Elmendorf was asked about the potential for job loss due to the law, he replied with the following clarification:


The reason that we don’t use the term “lost jobs” is there’s a critical difference between people who like to work and can’t find a job or have a job that was lost for reasons beyond their control and people who choose not to work.


If somebody comes up to you and says, “Well, the boss said I’m being laid off because we don’t have enough business to pay me,” that person feels bad about that and we sympathize with them having lost their job.


If somebody comes to you and says, “I’ve decided to retire” or “I’ve decided to stay home and spend more time with my family” and “I’ve decided to spend more time doing my hobby,” they don’t feel bad about it, they feel good about it, and we don’t sympathize. We say congratulations. And we don’t say they’ve lost their job because they have chosen to leave that job.


What this report suggests is that if you give people the option of individual health insurance, they may leave the job that provided them healthcare. This assumes full-time workers would rather spend 20 hours per week on hobbies and travel, and are only working in certain positions for the employee benefits.


As the number of small businesses in this country increases, it seems doubtful that the “job lock” phenomenon is really going to materialize to the tune of 2.5 million workers. Consider how many people would trade full-time wages for part-time income just for the sake of health insurance freedom.


Perhaps the CBO shouldn’t have even released this report, as it just confused people more, and it’s more theoretical than factual. It didn’t even touch on the fact that people have lost their full-time hours or positions at retail and restaurant chains making changes for the employer mandate.



Employer Mandate


Large employers are required to offer insurance plans to full-time workers starting in 2015, which prompted a number of companies to reduce hours and benefits for employees. This has also led to concerns about job loss under the health law.


The so-called employer mandate was supposedly the reason why opponents of the law who run businesses like the Carnegie Museum in Pittsburgh, Pennsylvania, Papa John’s, and Arizona State University to reduce employee hours to just under the law’s 30-hour requirement.


By staffing people who work 29 hours per week or less, companies could avoid having to provide coverage to those workers.