Rising Premium Costs, the Cadillac Tax, and Employers' Demand for Labor
Each paper in this proposed session addresses important aspects of the cost of employer-sponsored health insurance. In the first paper, the authors examine the recent slowdown in premium growth. The authors decompose the growth rates to help explain whether changes in premiums between 1999 and 2012 are due to changes in economic, health plan, worker, or employer characteristics. In the second paper, the author examines the impact of rising health insurance costs on employers’ demand for labor. The study asks whether rising costs lead employers to reduce employment and increase hours worked per employee, or shift towards relying more on part-time employees since under non-discrimination provisions, they can be excluded from coverage. The results from this paper have implications for predicting employer behavior after the implementation of the employer mandate in the ACA that requires large employers to provide coverage to full-time workers. In the third paper, the authors examine the incidence of the Cadillac tax by plan generosity, geography, and the characteristics of workers and employers, as well as estimate the per-worker and total revenue generated by the tax. This session will increase our understanding of the economic impacts of rising premium costs for employer-sponsored health insurance. As the economy rebounds from the recession, can we anticipate faster premium growth? As premium costs increase, how will this affect the demand for labor? Finally, how many and which types of plans are taxable under the Cadillac tax and how will that change over time?