The biggest entitlement legislation in a generation is causing barely a ripple in corporate America.
The Patient Protection and Affordable Care Act -- otherwise known as Obamacare -- is putting such a small dent in the profits of U.S. companies that many refer to its impact as “not material” or “not significant,” according to a Bloomberg review of conference-call transcripts and interviews with major U.S. employers.
That’s even after a provision went into effect this year requiring companies with 50 or more full-time workers to provide coverage, and after more workers are choosing to enroll in existing company coverage because of another requirement that all Americans get insured.
“It’s just part of doing business,” said Bob Shearer, chief financial officer of VF Corp., which owns the North Face and Vans apparel brands. “Obamacare has added costs, but not so much that we felt we had to talk about it specifically.”
The collective shrug from the nation’s biggest employers undermines the arguments of Republicans, who call the law a job- killer as they seek its repeal.
While U.S. health-care costs continued to rise faster than inflation in the five years since the law was passed, their rate of growth has slowed. Employers spent an average of $11,204 per worker for health benefits in 2014, up 4.6 percent from a year earlier, according to Mercer LLC. That growth rate was 6.1 percent or more each year from 1998 to 2011.
VF has seen health-care costs accelerate slightly in the last two years, though the added expense hasn’t changed the number of employees covered, Shearer said. That puts the Greensboro, North Carolina-based company in line with other employers, according to the Kaiser Family Foundation.
The average premium for covered workers in 2014 was $6,025 a year for an individual, up 2 percent from 2013, and $16,834 for a family, a 3 percent increase. Some companies are using higher co-payments and deductibles to require workers to share more costs.
“We have done some things we think are positive for employees and the company, including putting out more options like high-deductible plans and plans with health savings accounts,” said Jeff Huebschen, a spokesman for G&K Services Inc., a uniform-rental company in Minnetonka, Minnesota. “More choices, and it kept our company’s cost in check.”