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Obamacare will cost major employers nearly $5,000 per employee

Obama speaking at the University of Michigan on Wednesday
Obama speaking at the University of Michigan on Wednesday
Joshua Lott/Getty Images

Employers will wind up paying between $4,800 to $5,900 more per employee for their health insurance due to the Affordable Care Act, according to a report from the American Health Policy Institute that was released on Wednesday.

The institute surveyed 100 major businesses that have at least 10,000 employees, asking them about what will happen cost-wise due to Obamacare. Some of the results include:

  • The cost of the ACA to large U.S. estimated to be between $4,800 to $5,900 per employee.
  • These large employers will see overall ACA-related cost hikes of between $163 million and $200 million per employer, or an increase of 4.3 percent in 2016 and 8.4 percent in 2023 over and above what they would otherwise be spending.
  • The total cost of the ACA to all large U.S. employers over the next ten years is estimated to be from $151 billion to $186 billion.

“Cost increases in the range of $163 million to $200 million per large employer over the course of a decade will not be overlooked by CEOs, CFOs, or Boards of Directors,” the report states. “It is not yet clear what these changes will be. What is clear, however, is that the ACA has already altered the landscape of employer-provided health care, and will do so even more over the next decade.”

Currently, employers are spending $578.6 billion a year to cover 170.9 million employees, according to the report. If the costs increase, as the survey found they would, this could “affect how—and even whether—they provide health care for their employees.”

“This study is a c-suite diagnosis of how ACA is shaping large employer behavior,” said American Health Policy Institute president Tevi Troy. “We don’t know yet precisely how employers will react, but the study shows that employers will have to make real changes or incur heavy costs, which means that the ACA will have a significant impact on those in employer-sponsored health care.”

Past polls and surveys have shown negative consequences for businesses because of Obamacare, such as small businesses reporting that they are reducing both current employees and hiring due to the requirements the Affordable Care Act places on them.

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