How Does Health Insurance Affect Firm Employment and Performance? Evidence from Obamacare

54 Pages Posted: 21 Nov 2017 Last revised: 4 Feb 2021

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: January 15, 2021

Abstract

This paper studies how mandating employers to provide health insurance of a minimum quality and the associated increases in health insurance premia affect firm employment and performance. To do so, we use hand-collected firm-level employee health insurance data. We find that employers with greater exposure to the PPACA (“Obamacare”) reduce enrollments in their health insurance plans to a larger extent after the law was enacted. Employers achieve this reduction in enrollment by shifting employment composition from full-time to part-time employees. We further show that firms that are less likely to adjust their employment composition experience deterioration in performance.

Suggested Citation

Almeida, Heitor and Huang, Ruidi and Liu, Ping and Xuan, Yuhai, How Does Health Insurance Affect Firm Employment and Performance? Evidence from Obamacare (January 15, 2021). 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
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Champaign, IL 61820
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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
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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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