The Impact of Obamacare on Firm Employment and Performance

45 Pages Posted: 21 Nov 2017 Last revised: 3 Oct 2019

See all articles by Heitor Almeida

Heitor Almeida

University of Illinois at Urbana-Champaign; National Bureau of Economic Research (NBER)

Ruidi Huang

Southern Methodist University (SMU) - Finance Department

Ping Liu

Krannert School of Management, Purdue University

Yuhai Xuan

University of California, Irvine - Paul Merage School of Business

Date Written: September 28, 2019

Abstract

We study the impact of the Patient Protection and Affordable Care Act (PPACA) on firm employment and performance using hand-collected firm-level employee health insurance data. We show that the PPACA is associated with a significant increase in health insurance premiums for employees in company-sponsored health insurance plans. In response, companies with a large fraction of employees on their health insurance plans prior to the PPACA actively reduce enrollment in these plans after the law was enacted by shifting their employment compositions from full-time employees to part-time, temporary, or seasonal workers, who are not covered in employer-sponsored health insurance plans. We do not find any evidence of deterioration in health insurance plan quality or in performance at companies that were more exposed to the increase in health insurance premiums.

Suggested Citation

Almeida, Heitor and Huang, Ruidi and Liu, Ping and Xuan, Yuhai, The Impact of Obamacare on Firm Employment and Performance (September 28, 2019). Available at SSRN: https://ssrn.com/abstract=3073378 or http://dx.doi.org/10.2139/ssrn.3073378

Heitor Almeida (Contact Author)

University of Illinois at Urbana-Champaign ( email )

515 East Gregory Drive
4037 BIF
Champaign, IL 61820
United States
217-3332704 (Phone)

HOME PAGE: http://www.business.illinois.edu/FacultyProfile/faculty_profile.aspx?ID=11357

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ruidi Huang

Southern Methodist University (SMU) - Finance Department ( email )

United States

Ping Liu

Krannert School of Management, Purdue University ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States
7654944691 (Phone)

Yuhai Xuan

University of California, Irvine - Paul Merage School of Business ( email )

4291 Pereira Drive
Irvine, CA California 92697-3125
United States

HOME PAGE: http://yuhai.merage.uci.edu/

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