Dissertation manuscript jeetendra dash

The Impact of Affordable Care Act on Retail Employees in Southern United States
Submitted by
Jeetendra Narayan Dash
A Dissertation Presented in Partial Fulfillment
of the Requirements for the Degree
Doctorate of Business Administration
Columbia Southern University
Orange Beach, Alabama
March 11, 2015

Abstract
President Barrack Obama signed the Affordable Care Act (ACA) into law in March
2010, to expand health coverage to millions of uninsured Americans. Coverage to the
low-income Americans through federal subsidies is feasible because majority of
Americans get health coverage through the Employer-Sponsored Insurance (ESI). If the
employees already enrolled with the ESI migrate to the ACA marketplace and avail
premium subsidies just as the individuals, who have no access to the ESI, the viability of
the ESI will be questionable and the ACA will fail to achieve the goal. The researcher
conducted a survey of 203 front-line retail executives in the Southern United States to
see if and to what degree migration of the retail employees would occur in the Southern
United States. The current study sample data did not support migration of the employees
from the ESI to the ACA marketplace. In the current study, Age, Ethnicity, and annual
household income of the employees are somewhat likely to influence the decision of the
employees to migrate from the ESI to the ACA marketplace. None of the variables were
however a factor in overall modeling of relationship among the variables. Majority of
the employees in the present research study continue to value the employment-based
health coverage and do not have however a clear understanding of the act.
Keywords: Employer-Sponsored Insurance, Affordable Care Act, Affordable Care
Act marketplace

iv
Dedication
I dedicate the dissertation to my late parents, Mr. Ram Narayan Dash and Mrs.
Kshetramani Dash, who did not live long to see me immigrating to the United States and
reaching the goals of my academic pursuits. I also dedicate this dissertation to my wife,
Soma, who patiently tied her future happiness to my educational dream and missed her
family for years. Finally, I dedicate my dissertation to my brother-in-law Dr. Mishra and
family in Massachusetts, who always take a genuine pride in my success.

v
Acknowledgements
To Dr. Michelle Manganaro, my Chair, who sustained my hope and helped me
accomplish my educational goals. I am equally grateful to Dr. Stephen Onu, member of
my dissertation committee, for his thoughtfulness and valuable suggestions throughout
the dissertation process. Thanks Dr. Rounds, Dr. Cates, Dr. Nelson, and Dr. Zee for the
support early in the research process. Sincere thanks to Dr. Gary Piercy, Director, DBA
program, IRB, and the CSU staffs, who relentlessly strive to make the journey of the
students worthwhile.
I remain grateful to the health care research experts, who reviewed the
questionnaire for face validity. Dr. Johnathan Gruber, MIT economist, who was the
architect of health care reform in Massachusetts, and played a significant role in health
care reform at the federal level, was too generous to look at the questionnaire. Professor
Katie Keith, Georgetown University Health Policy Institute’s Center on Health Insurance
Reforms and monitoring implementation of the ACA, was kind enough to do a thorough
review of the questionnaire and provide valuable suggestions for substantial improvement
of the questionnaire. Emily Pattat, director of marketing research and analysis,
ALSAC/ST. Jude Children’s Research Hospital, helped improve the look and feel, and
survey-worthiness of the questionnaire.
I remain indebted to Dr. Paul Fronstin, Director, Employee Benefit Research
Institute, Washington D.C., for his kind permission to use the questions used in the 2012
health confidence surveys. Finally, I express my heartfelt gratitude to the retail executives
in the Southern United States, whose participation in the survey was seminal to the
eventual production of this dissertation manuscript.

vi
Table of Contents
Chapter 1: Introduction to the Current Study ......................................................................1
An Overview of the Topic .............................................................................................1
Background of the Study ...............................................................................................6
Problem Statement.......................................................................................................10
Purpose of the Study....................................................................................................12
Research Questions and Hypotheses ...........................................................................14
Contribution to Knowledge..........................................................................................17
Significance of the Study.............................................................................................18
Rationale for Methodology..........................................................................................20
Nature of the Study......................................................................................................21
Definition of Terms......................................................................................................22
Assumptions, Limitations, and Delimitations..............................................................25
Summary......................................................................................................................28
Chapter 2: Literature Review.............................................................................................31
An Overview to the Chapter ........................................................................................31
Theoretical and Conceptual Framework for the Current Study...................................34
Review of Relevant Scholarship..................................................................................37
Employment-Based Insurance ..........................................................................37
Employers’ motivation for offering health insurance............................... 38
The Massachusetts experience.................................................................. 39
Employers’ response following the current legislation ............................ 40
Post-ACA relevance of health benefits in workforce management.......... 41

vii
The Affordable Care Act ...................................................................................45
Managing the rising cost of health care. ..................................................... 47
ACA, the three-legged stool ....................................................................... 48
Expansion of coverage to millions of uninsured Americans ...................... 49
Pre and post-ACA expansion of coverage and expenditure ....................... 50
ACA and erosion of ESI ............................................................................. 52
Impact of the Current Legislation on Employers and Employees .....................55
Viability of employer-sponsored health coverage ...................................... 57
Employers’ strategy in the post-ACA period.............................................. 59
Summary..................................................................................................................... 69
Chapter 3: Research Methodology/Ethics ........................................................................ 75
An Overview to the Chapter ....................................................................................... 75
Reinstatement of the Problem..................................................................................... 76
Research Questions and Hypotheses .......................................................................... 77
Research Methodology ............................................................................................... 79
Research Design.......................................................................................................... 80
Population and Sample Participants............................................................................ 82
Sampling method ............................................................................................. 83
Appropriateness of the sample size.................................................................. 84
Research Instrument.................................................................................................... 84
Categorization of age ....................................................................................... 85
Categorization of annual household income.................................................... 86
Cover letter....................................................................................................... 87
Validity ....................................................................................................................... 87
Pilot testing the questionnaire.......................................................................... 88

viii
Reliability.....................................................................................................................89
Operational Definition of Research Variables.............................................................90
Data Collection Procedure...........................................................................................90
Participant response rate ..................................................................................91
Data Analysis...............................................................................................................91
Procedure to test the hypotheses......................................................................92
Ethical Assurances.......................................................................................................99
Limitations of the Current Study ...............................................................................100
Summary of the Chapter ............................................................................................101
Chapter 4: Research Findings ..........................................................................................103
An Overview to the Chapter ......................................................................................103
Method of Analysis....................................................................................................103
Research Questions and Hypotheses .........................................................................106
Demographic Statistics of the Survey Participants....................................................108
Results........................................................................................................................111
Correlation between the ACA and migration to the ACA marketplace ..............111
Migration of the employees with the ESI to the ACA marketplace ....... 116
Effects of age on migration of employees to the ACA marketplace ...................117
Kruskal-Wallis H test of variance on age ............................................... 117
Chi-square tests of association between employees’ age and ordinal
measure of migration to the ACA marketplace ...................................... 119
Chi-square tests of association between employees’ age and absolute
Age-wise break-up of employees with ESI indicating option to
migrate to the ACA marketplace ............................................................ 124

ix
Effect of ethnicity on migration of employees to the ACA marketplace ...........124
Kruskal-Wallis H test of variance on ethnicity....................................... 125
Chi-square tests of association between employees’ ethnicity and ordinal
Chi-square tests of association between employees’ ethnicity and absolute
Ethnicity-wise break-up of employees with ESI indicating option to
Effect of family-size on migration of employees to the ACA marketplace .......132
Kruskal-Wallis H test of variance on family-size................................... 132
Chi-square tests of association between employees’ family-size and
ordinal measure of migration to the ACA marketplace.......................... 133
Chi-square tests of association between employees’ family-size and
absolute measure of migration to the ACA marketplace........................ 135
Family-size-wise break-up of employees with ESI indicating option to
Effect of gender on migration of employees to the ACA marketplace...............137
Kruskal-Wallis H test of variance on gender.......................................... 138
Chi-square tests of association between employees’ gender and
ordinal measure of migration to the ACA marketplace.......................... 139
Chi-square tests of association between employees’ gender and
absolute measure of migration to the ACA marketplace........................ 141
Gender-wise break-up of employees with ESI indicating option to
Effects of income on migration of employees to the ACA marketplace .............143
Kruskal-Wallis H test of variance on annual household income............ 143
Chi-square tests of association between employees’ annual household
income and ordinal measure of migration to the ACA marketplace ...... 145

x
Chi-square tests of association between employees’ annual household
income and absolute measure of migration to the ACA marketplace .... 147
Income-wise break-up of employees with ESI indicating option to
migrate to the ACA marketplace. ........................................................... 150
PLUM-ordinal regression analysis ..................................................................... 151
Attitude of the Employees toward the Job-Based Health Coverage and the ACA... 152
Views on the employer-sponsored health insurance........................................ 152
Confidence in the employer............................................................................. 159
Views on the ACA........................................................................................... 160
Attitude toward choice of plan......................................................................... 161
Knowledge and confidence to buy the ACA coverage.................................... 162
Conclusions............................................................................................................... 164
Chapter 5: Summary, Conclusions, and Recommendations........................................... 172
An Overview to the Chapter ..................................................................................... 172
Summary of Findings................................................................................................ 173
Conclusions............................................................................................................... 174
Correlation between the ACA and migration of the retail employees to the ACA
Marketplace......................................................................................................... 180
Correlation between the outcome variable and the factor variables....................181
Age and migration of the employees to the ACA marketplace ...........................181
Age-wise break-up of employees with ESI indicating option to
Ethnicity and migration of the employees to the ACA marketplace ...................182
Ethnicity-wise break-up of employees with ESI indicating option to

xi
Family-size and migration of the employees to the ACA marketplace...............183
Family-size-wise break-up of employees with ESI indicating option to
Gender and migration of the employees to the ACA marketplace ......................184
Gender-wise break-up of employees with ESI indicating option to
migrate to the ACA marketplace. ........................................................... 185
Annual income and migration of the employees to the ACA marketplace .........185
Income-wise break-up of employees with ESI indicating option to
PLUM-ordinal regression analysis ..................................................................... 186
Employees’ attitude toward the ESI and the ACA ............................................. 187
Recommendations..................................................................................................... 190
Employer-sponsored insurance in the post-ACA period ............................. 191
Response of the retail employers to the current legislation ......................... 192
Managing the workforce.............................................................................. 192
Probable consequences of the current legislation ........................................ 192
References....................................................................................................................... 195
Appendix A: Survey Questionnaire................................................................................ 227
Appendix B: Participants Listed by Store Type ............................................................. 234
Appendix C: Permission from the Economic Policy Institute to Use Figure 1 .............. 236
Appendix D: Permission from the Kaiser Family Foundation to Use Figure 2.............. 237
Appendix E: Permission from the Congressional Research Service to Use Figure 3 .... 239
Appendix F: Permission from the Commonwealth Fund to Use Figure 4 and 5........... 241
Appendix G: Permission to Use Figure 6 in U.S. Chamber of Commerce Publication . 243
Appendix H: Permission from New England Journal of Medicine to Use Figure 7 ...... 244

xii
Appendix I: Permission from the Heritage Foundation to Use Figure 8.........................246
Appendix J: Permission to Use Survey Questions...........................................................248
Appendix K: Participant Consent Form...........................................................................249
Appendix L: Site Authorization Permission Request Letter............................................251
Appendix M: Site Authorization Letter ...........................................................................252
Appendix N: Internal Review Board (IRB) Conditional Approval Letter ......................253
Appendix O: Certificate of Completion of NIH Training ...............................................254

xiii
List of Tables
Table 1. Current Study Variables...................................................................................... 80
Table 2. Reliability Statistics............................................................................................ 89
Table 3. Age Group of the Current Survey Participants (N=202) .................................. 109
Table 4. Family-Size Composition of the Current Survey Participants (N=202)........... 110
Table 5. Annual Household Income of the Current Survey Participants (N=187)......... 111
Table 6. Paired Samples Statistics: Pre ACA and Post ACA Participation of
Employees in the Employer-Sponsored Insurance (N=195) ............................ 114
Table 7. Paired Samples Test: Pre ACA and Post ACA Participation of Employees in
the Employer-Sponsored Insurance (N=195) ................................................... 114
Table 8. Wilcoxon Signed Ranks Test: Pre ACA and Post ACA Comparison of the
Mean Rank of Employees’ Participation in the ESI (N= 195) ......................... 115
Table 9. Wilcoxon Signed Ranks Test: Hypothesis Test Summary (N=195) ................ 116
Table 10. Test Statisticsa,b
for Kruskal-Wallis One-Way Analysis of Variance Test
on Age (N=198:Migration to the ACA Marketplace, N=202: Age)............... 118
Table 11. Chi-square Tests of Association between Employees' Age and Ordinal
Measure of Migration to the ACA Marketplace (N=197) .............................. 120
Table 12. Symmetric Measure of Association between Employees’ Age and Ordinal
Table 13. Chi-square Test of Association between Employees’ Age and Absolute
Measure of Migration to the ACA Marketplace (N=196) ...............................122
Table 14. Symmetric Measure of Association between Employees’ Age and
Absolute Measure of Migration to the ACA Marketplace (N=196)............... 122

xiv
Table 15. Parameter Esimates of the Coefficients of the PLUM Ordinal Regression
Model: Employees' Age and Migration to the ACA Marketplace (N=188)... 123
Table 16. Age-Wise Break-up of Employees with ESI Indicating Option to Migrate
to the ACA Marketplace if Decided Not to Stay with ESI (N=44) ................ 124
for Kruskal-Wallis One-Way Analysis of Variance Test on
Ethnicity (N=198: Migration to the ACA Marketplace, N=203: Ethnicity)... 126
Table 18. Chi-square Test of Association between Employees’ Ethnicity
and Ordinal Measure of Migration to the ACA Marketplace (N=198) .......... 127
Table 19. Symmetric Measure of Association between Employees’ Ethnicity
Table 20. Chi-square Test of Association between Employees’ Ethnicity
and Absolute Measure of Migration to the ACA Marketplace (N=197)....... 129
Table 21. Directional Measure of Association between Employees’ Ethnicity
and Absolute Measure of Migration to the ACA Marketplace (N=197)........ 130
Table 22. Ethnicity-Wise Break-up of Employees with ESI Indicating Option to
Migrate to the ACA Marketplace if Decided Not to Stay with ESI (N=44) .. 131
for Kruskal-Wallis One-Way Analysis of Variance Test on
Family-Size (N=198: Migration to ACA Marketplace, N=202: Family-Size)133
Table 24. Chi-square Test of Association between Employees' Family-Size and
Ordinal Measure of Migration to the ACA Marketplace (N=197).................134
Table 25. Chi-square Test of Association between Employees' Family-Size and
Absolute Measure of Migration to the ACA Marketplace (N=196).............. 136

xv
Table 26. Family-Size-Wise Break-up of Employees with ESI Indicating Option to
for Kruskal-Wallis One-Way Analysis of Variance Test
on Gender (N=198: Migration to the ACA Marketplace, N=203: Gender) ... 138
Table 28. Chi-square Test of Association between Employees’ Gender and Ordinal
Table 29. Chi-square Tests of Association between Employees’Gender and Absolute
Table 30. Gender-Wise Break-up of Employees with ESI Indicating Option to Migrate to
ACA Marketplace if Decided Not to Stay with ESI (N=44) .......................... 142
Kruskal-Wallis One-Way Analysis of Variance Test on
Annual Income (N=198: Migration to ACA Marketplace, N=187: Income). 144
Table 32. Chi-square Test of Association between Employees’ Annual Income and
Ordinal Measure of Migration to the ACA Marketplace (N=183)................. 146
Table 33. Symmetric Measure of Association between Employees' Annual Income
Table 34. Chi-square Test of Association between Employees’ Annual Income and
Absolute Measure of Migration to the ACA Marketplace (N=183)............... 147
Table 35. Paired Samples Test: Pre ACA and Post ACA Comparison of Means of
Employees’ Participation in the ESI for the Income Group Income Group
$23,551-$33,000 (N=24)……………………………………………….……148

xvi
Table 36. Wilcoxon Signed Ranks Test: Pre ACA and Post ACA Comparison of the
Mean Rank of Employees’ Participation in the ESI for the Income Group
$23,551-$33,000 (N=24) ................................................................................ 149
Table 37. Parameter Estimates of the Coefficients for PLUM Ordinal Regression Model:
Migration to ACA Marketplace and Annual Household Income (N=183) .... 149
Table 38. Income-Wise Break-up of Employees with ESI Indicating Option to
Table 39. Plum Ordinal Regression Model Fitting Information (N=182)...................... 151
Table 40. Parameter Estimates of the Coefficients of the PLUM Ordinal Regression
Model: Migration to the ACA Marketplace with Age, Ethnicity, Income,
Gender, and Family-Size (N=182).................................................................. 152
Table 41. Summary of the Current Research Findings................................................... 165
Table 42. Summary Demographic Statistics of the Survey Participants ........................ 175

xvii
List of Figures
Figure 1. Share of the Under 65 Population with Employer-Sponsored Health Insurance,
2000-2010………………………………………………………………………………..38
Figure 2. Uninsured Rates among Selected Industry Groups, White vs. Blue Collar Jobs,
2012……………………………………………………………………………………... 45
Figure 3. Maximum Percentage of Income, as Measured by FPL, to Go Towards
Premium Contribution…………………………………………………………………... 49
Figure 4. Total National Health Expenditure (NHE), 2009-2019 Before and After
Reform…………………………………………………………………………………... 51
Figure 5. Trend in Number of Uninsured Nonelderly, 2013-2019 Before and After
Reform…………………………………………………………………………………... 51
Figure 6. Flowchart Outlining the Employer Mandate and Penalties……………………61
Figure 7. Effect of the Affordable Care Act on Workers’ Health Insurance Options…...65
Figure 8. Estimated Loss of Employer Coverage After Full Implementation of the
Affordable Care Act……………………………………………………………………...67
Figure 9. Gender Identity of the Current Survey Participants (N=203)……………….. 108
Figure10. Ethnicity Origin of the Current Survey Participants (N=203)……………… 109
Figure 11. Pre ACA and Post ACA Comparison of Employees’ Participation in the
Employer-Sponsored Insurance (N=195)………………………………………………114
Figure 12. Importance of Health Benefits in Choosing a Job (N=203)………………...154
Figure 13. Importance of the Employer Offering a Choice of Health Plan (N=202)…..155
Figure 14. Employee Interest in Employer Providing More Health Plan Choices (N=201)
…………………………………………………………………………………………. 155

xviii
Figure 15. Employee Will Work Even If Employer Offers No Health Benefits (N=199)
…………………………………………………………………………………………. 156
Figure 16. Employees Like the Most about Job-Based Health Insurance (N=195)…… 157
Figure 17. Employees Dislike the Most about Job-Based Health Insurance (N=192)…157
Figure 18. Likelihood of Company Not Offering Health Benefits (N=196)…………...158
Figure 19. Employees Satisfaction with Job-Based Health Insurance (N=191)………. 159
Figure 20. Confidence of Employee in Employer Choosing the Best Available Plan
(N=196)…………………………………………………………………………………159
Figure 21. Employees Like the Most about the Affordable Care Act (N=182)……….. 160
Figure 22. Employees Dislike the Most about the Affordable Care Act (N=185)……..161
Figure 23. Most Important to the Employees in Comparing and Choosing a Plan (N=187)
…………………………………………………………………………………………..161
Figure 24. Employees Preference about Health Insurance Coverage (N=194)………...162
Figure 25. Employees' Confidence to Buy Health Insurance at the ACA Marketplace if
Company Stopped Providing Health Insurance (N=196)………………………………163
Figure 26. Employees’ Knowledge about the Affordable Care Act (N=199)………….163
Figure 27. Employees’ Opinion about Employer Communicating More Regarding How
the Affordable Care Act Affects the Employee and Family (N=199)………………….164
Figure 28. Pre-ACA and Post-ACA Comparison of Mean Responses of Participants’
Likely Participation in the ESI (N=195)………………………………………………..180
Figure 29. Employees' Satisfaction with the Employer-Offered Benefits (N=172)……187
Figure 30. Confidence of Employee in Employer Choosing the Best Available Plan
(N=196)…………………………………………………………………………………188

xix
Figure 31. Employees' Confidence to Buy Health Insurance at the ACA Marketplace if
Company Stopped Providing Health Insurance (N=196)………………………………189
Figure 32. Employees’ Knowledge about the Affordable Care Act (N=199)………….189
Figure 33. Employees’ Opinion about Employer Communicating More Regarding How
the Affordable Care Act Affects the Employee and Family (N=199)………………….190

1
Chapter 1: Introduction to the Current Study
An Overview of the Topic
President Barrack Obama signed the Patient Protection and Affordable Care Act
(PPACA), commonly known as the Affordable Care Act (ACA), into law in March 2010.
The goal of the current piece of legislation is to improve the health care system of the
nation by extending the health insurance coverage to millions of uninsured Americans.
The provisions of the act include incentives, which will influence the decisions of the
employers and the employees regarding the health coverage benefits. According to the
Congressional Budget Office (CBO):
there is clearly a tremendous amount of uncertainty about how employers and
employees will respond to the set of opportunities and incentives under [the
ACA]… there is uncertainty regarding many other factors, including the future
growth rate of private insurance premiums and the number of individuals and
families who will have income in the eligibility ranges for Medicaid, CHIP, and
marketplace subsidies. Moreover, the models … are generally based on observed
changes in behavior in response to modest changes in incentives, but the
legislation enacted in 2010 is sweeping in its nature. (as cited in Schoenman,
2013, p. 10)
According to the CBO and the Joint Committee on Taxation (JCT) estimate, the ACA
could lower federal budget deficit by $143 billion between 2010 and 2019 (Lambrew,
2012) and save about $1 trillion between 2020 and 2029 (Waldron, 2012). The current
legislation is also likely to affect the way the employers manage the health care benefits
of the employees, and eventually, the organizational cost structure.

2
Since the Second World War, the ESI has been the backbone of health care
coverage in the United States (Blumenthal, 2006; Entoven & Fuchs, 2006; Glied, 2005, p.
37). Eventual success of the ACA is dependent on the durable concept of the ESI
(Blumberg, Buettgens, Feder, & Holahan, 2011). By 2000, the ESI was at the highest
level covering almost 66.8% of non-elderly Americans in the United States (Blumenthal,
2006). In contrast, in most other advanced nations, such as Canada and western European
nations, the respective governments assume the responsibility of providing health
coverage (Blumenthal, 2006; Rodwin, 1987). From the employers’ perspective, the
management uses the Employer-provided health insurance as a strategic component of
employee benefits package, for managing the workforce.
A steady drop in availability of the ESI coverage occurred across the United
States between 2000 and 2010 (Gould, 2012; Greene, 2013). In the survey by the U.S.
Census Bureau (2011), more than half of the Americans (55.1%) had employment-based
health insurance coverage and the rate had steadily declined from 64.4% to 56.5%
between 1997 and 2010 (Janicki, 2013). According to Sonier, Au-Yeung, and Auringer
(2013), the state-by-state analysis of trends in the ESI report in April 2013, by Robert
Wood Johnson Foundation agreed to the above assertion that the ESI sharply declined
between 2000 and 2010. In 2010-2011, the employers provided health insurance
coverage to nearly 60% of non-elderly population, compared to about 70% in 1999-2000.
The average individual annual premium almost doubled from $2,490 in 2000 to $5,081 in
2011, and the average total annual premium for a family for the same period went up by
125%, from $6,414 to $14,447 (Sonier, Au-Yeung, & Auringer, 2013). Between 2000
and 2010, the stagnating wage and the soaring insurance premium were the reasons for

3
the employees to stop seeking health insurance even if offered by the employers (Randall,
2013).
The rising cost of health care and the consequent increase in the health insurance
premium over the years resulted in a drop in the employment-based coverage (Cutler,
2003). The health care cost, which kept increasing over the years, currently accounts for
around 17% of Gross Domestic Product (GDP), and is likely to reach 20% of GDP by
2021 (Kaiser Health News, 2012). According to Hogberg, a section of Americans
maintain the view that federal government could adequately address the health care issues
of the nation, while other Americans view excessive government interference in the
administration of health care is inconsistent with the system of free market economy
adopted by the nation (as cited in Discoverthenetworks.org, n.d.). The current health care
legislation, which went into full effect starting January 1, 2014, is likely to expand health
care coverage to most Americans and contain the exploding cost. The new law will
change the way both the employers and the employees perceive and value the
employment-based health insurance.
Under the ACA, provision for the health insurance of the employees by the
employers is not mandatory (Harvard Pilgrim HealthCare, n.d.; Kaiser Family
Foundation, 2013). The act requires that the employers with fifty or more full-time
employees pay a fine, should the employers decide not to provide health insurance to the
full-time employees. The act requires the employers to provide affordable coverage
(HealthCare.gov, n.d.) to the eligible employees to avoid additional penalty, which is
referred to as the Employer mandate (Chaikind & Peterson, 2010; U.S. Chamber of
Commerce, 2013). Starting 2018, the act also requires the employers to pay Cadillac

4
health plan tax (Gold, 2010; Justice, 2012) for providing high value insurance plans to the
employees.
From the employees’ perspective, the employees should also decide who manages
the future health care of the employees and how. Under the current legislation, the
employees have the choices either to have health coverage, such as, participating in the
employer-sponsored health insurance or buying the health insurance in the marketplace,
also referred to as the exchange, created under the ACA (Health Insurance 101, 2011).
The marketplace includes provision for health coverage to the individuals, who have no
health insurance or who fail to get coverage at the workplace. Individuals, who neither
participate in the ESI plan nor buy personal health insurance in the marketplace, will
have to pay the federally mandated penalty, referred to as the Individual mandate (Baker,
2013; Cigna, 2013). Definitions of the terms used in the current study have been included
in a separate section of the manuscript.
The eventual success of the health care system under the current legislation is
dependent on how well the current legislation capitalizes on and augments the already
established employment-based health care system in the country (Haberkorn, 2011). The
previous system included provision for health coverage through a combination of private
workplace-based insurance and provision for the elderly and the poor by the government,
through Medicare and Medicaid entitlement programs. The Employment-based
insurance, which has been the chief source of providing health insurance, however failed
to include all the employees. The low-wage employees remained uninsured and declined
the health insurance, even if the employers offered coverage (Cunningham, Schaefer, &
Hogan, 1999). Additionally, another associated issue is healthy and young Americans,

5
according to Young (n.d.), do not want to buy health coverage. First, the current
legislation capitalizes on the existing employment-based health insurance making health
insurance more affordable to the employees, and second, the act includes subsidies to the
individuals, who the employers cannot provide coverage.
The success of the hybrid health care system under the current legislation, such as
augmenting the old system with additional features to include universal health coverage,
depends on the shared responsibilities among all the participants in the system, such as
the government, the insurance companies, the employers, the employees, the individuals,
and other stakeholders (Democratic Policy and Communication Center, n.d.; Sussman,
Blendon, & Campbell, 2009). According to the Democratic Policy and Communication
Center (n. d.), the ACA is a framework for everyone to play the part to ensure success of
the new health care system. The Democratic Policy and Communication Center (n.d.)
noted that the government includes provision for affordable and quality coverage; health
insurance companies will operate with new rules and new roles; there will be alignment
among the hospitals, physicians, and other medical providers to improve the quality and
outcome of health care. Additionally, pharmaceutical companies and medical device
companies will help finance the cost of affordable health coverage to the Americans;
employers with fifty or more full time employees will pay fine for not offering health
coverage or for providing unaffordable health coverage; and individuals, who remain
uninsured but can afford health coverage, will have to pay tax penalty.
Health insurance coverage under the current legislation to millions of uninsured
American through subsidies is feasible on the assumption that the employers will
continue to provide health insurance coverage to the majority of the employees, as usual

6
(Blumberg et al., 2011). One of the major factors that might make the health care system
of the nation envisioned that in the ACA work less efficiently is the migration of the
employees from the employer-offered health insurance coverage to the ACA marketplace
(Orentlicher, 2014; Troy & Wilson, 2014). In the event employees opt out of health
coverage at the workplaces, there will be a marked increase in the employer-sponsored
health insurance premium, leading to eventual abandonment of the employment-based
health insurance, the current legislation capitalizes on (Merhar, 2014; Regopoulos &
Trude, 2004; Ubel, 2013).
Background of the Study
The employees in the United States have always depended on the employment-
based health insurance (ESI) as the chief source of health insurance coverage. On an
average, more than 60% of the employees in the United States get the health coverage
through the employers (Sonier et al., 2013). Maxwell (2012) noted that the practice of
offering health insurance coverage through employment became more popular during and
after the Second World War, in response to the federal wage regulation (p. 52). Since
employers were restricted in giving higher wages, the employers used health insurance
coverage as a term of employment to manage a talented workforce and ensure
competitiveness. The workplace also contained a mechanism for smooth accountability
of the insurance premium as the employers deduct the insurance premium during the pay
period from employees’ wages. The employment-based health insurance as such proved
to be a dependable source of health insurance coverage in the United States (Hermer,
2006; Schoenman, 2013).

7
Although stable for more than half a century, between mid-1950s and 2010, the
employment-based health insurance was not free from issues before the current
legislation (Enthoven & Fuchs, 2006). First, the administrative cost of employment-based
insurance continued to be as high as 11% of insurance premium. Second, there was
inequitable cost sharing among the stakeholders in the health care management process.
Third, employment-based insurance failed to extend coverage to other segments of the
population, such as the low-wage employees, whose health care issues over the years
remained unaddressed (Collins, Schoen, & Colasanto, 2003).
Employment-based health insurance also impeded job mobility as the employer-
offered health coverage is tied with the employees’ jobs. The loss of job very often leads
to the loss of health coverage (Warren, 2005). The situation was worse for the employees
with existing medical conditions in the absence of a viable alternative. Blumenthal (2006)
stated that a heavy reliance on the employer-provided health insurance, which has
evolved in the United States over the last 70 years from 1940 to 2010 in an unplanned
way, is an accident of history. According to Reinhardt, if the planners of the health care
system were to start the ESI from the scratch, the planners would probably structure the
health care system differently (as cited in Blumenthal, 2006).
The worst economic recession since the great depression shattered the U.S.
economy and many Americans lost jobs (Farber, 2011). The health care system in the
U.S. being mainly employment-based, a significant number of people went without the
health insurance. The timing of the current legislation was perfect for many needing
essential health benefits (Collins, Doty, Robertson, & Garber, 2011). Even during the
sluggish recovery during the last few years through the government incentive programs,

8
employers did not add as many jobs as expected. Workers, who got the jobs back, ended
up mostly with part-time, low-wage jobs (Raum & Agiesta, 2013). The low-wage
employees would rather have the cost of the insurance premium added back to the
compensation package than participate in the employer-offered insurance (Maxwell 2012,
pp. 36-37). With the insurance premium soaring between 2000 and 2010, and the
economy having a recovery from the worst recession, health care benefit as part of the
employee compensation package no longer seemed an attractive option to many
employers. Fronstin (2007) noted that there was a clear message from the associations
representing employers that a comprehensive and viable alternative must replace the
current systems of employment-based health insurance.
The goal of the ACA is health insurance coverage to millions of uninsured, and
containment of the soaring cost of health care benefits. The act also contains provision to
prohibit some of the unfair practices of the insurance companies such as charging higher
insurance premiums to people with medical conditions and putting a lifetime dollar limits
on coverage (The White House, 2012). The current legislation is a hybrid mechanism,
which includes provision for health insurance to millions of uninsured Americans. First,
the current legislation capitalizes on the employment-based insurance system by making
employer-offered health coverage more robust (Blumberg et al., 2011). Second, under the
current legislation, persons, who are not covered at the workplace, could get health
coverage at the ACA marketplace in each state. Additionally, based on the annual
household income of the taxpayers, the government subsidizes the insurance premium on
a sliding income scale (Kaiser Family Foundation, 2014).

9
Evaluation of the costs and benefits associated with the health insurance offer,
according to Maxwell (2012), is an important consideration in deciding whether an
employer offers health insurance to the employees or not (p. 43). The employers consider
the costs of offering health coverage from the angle of the premiums, administrative
costs, the quality of the plans offered, and access to the coverage offered. The perception
that a provision for benefits replaces a portion of the employees’ compensation varies
among companies based on the size and nature of business (Maxwell, 2012, p. 83).
Participation of more eligible employees in the employer-sponsored health insurance plan
allows the employer to minimize the average insurance premium per employee (United
States Department of Labor, 2001). Larger firms are therefore more likely to have
provision for health insurance to the employees because of the low probability of adverse
selection in a large group of employees (Maxwell, p. 10).
Access to health care in the case of an emergency has always been there in the
United States (Drum, 2007). The concern is how to contain the rising cost of health care
and how to pay for the health care cost of the nation. With the cost of insurance premium
rising, the employers dropped many employees and in fact, many young healthy people,
according to Young (n.d.), do not want to pay for the coverage. To avoid the above
scenario, the ACA requires all the participants in the health care system to pay fair share
of the health care cost of the nation. According to the Democratic Policy Communication
Center (n.d.), healthcare reform will not be comprehensive unless the reform reaches out
individuals, employers, providers, and the insurance industry. Without payment coming
from the healthy people, the health care cost will be high and the burden of insurance cost
would fall disproportionately on the people in poor health conditions (Sandrock,

10
Singleton, Manna, & Diamond LLC, 2011, p. 6). Greater emphasis under the current
legislation is on the employment-based health insurance, because the system is already
working for the majority of Americans (Blumberg et al., 2011). In addition, the current
legislation includes a mechanism for collection of the insurance premium (Sandrock et
al., 2011, p. 6).
Gibbs noted that the employment-based health insurance coverage is one of the
important components of health care management in the United States and the goal of the
current legislation is to make the employment-based health insurance coverage more
robust (as cited in Troy, 2014). The success of the employment-based insurance depends
on the employees’ acceptance of the workplace-based health insurance. If the employees
decide to buy the health insurance at the ACA marketplace instead, the viability of the
ACA will be questionable (Orentlicher, 2014). Migration of employees from the
employer-provided insurance to the ACA marketplace will increase workplace insurance
premium, leading to eventual abandonment of the employer-sponsored health coverage
(Merhar, 2014; Regopoulos & Trude, 2004). The current research study will explore if
and to what degree, the employees will decide to opt out of the ESI, and migrate to the
ACA marketplace to buy the health insurance coverage.
Problem Statement
The goal of the ACA is expansion of health coverage to the low-income
Americans, who do not have access to health coverage through the employers (Merlis,
2011). Health coverage to the low-income Americans through federal subsidies is
possible because the vast majority of Americans get health coverage through the ESI
(Blumberg et al., 2011). Stability of the ESI is as such integral to the viability and

11
eventual success of the legislation (Blumberg et al., 2011; Orentlicher, 2014). If the
employees, who have insurance coverage through the employers migrate to the
marketplace created under the act, and avail the subsidies just as the low-income
individuals, who have no health coverage at the workplace, future existence of the ESI
will be questionable (Enthoven & Fuchs, 2006; Regopoulos & Trude, 2004). Migration
of the employees from the workplace-based health insurance to the ACA marketplace
will undermine the eventual success of the act (Orentlicher, 2014; Troy & Wilson, 2014).
The problem of the current research is that it is not known, if and to what
degree, a correlation exists between the ACA and migration of the retail employees in the
Southern United States, from the ESI to the ACA marketplace. As the first annual
enrollment period under the ACA ends, understanding the changes in the employer-
provided health insurance coverage (ESI) is important since most Americans receive
health insurance coverage through the employers (Avalere Health LLC, 2011; Claxton,
Levitt, Brodie, Garfield, & Damico, 2014). Austin, Luan, Wang, and Bhattacharya (2013)
noted that as the implementation of the act continues, any change in the rate of
participation is of special interest to the policy makers and the research analysts.
Keeping up with the spiraling health care cost, insurance premium markedly kept
increasing and thinning out of the job-based insurance was already well under way
(Enthoven & Fuchs, 2006). The findings of the current research study include greater
insight into the attitude of the retail employees when alternative such as marketplace
under the ACA is available. The current research study could help the retail employers
understand if sponsoring health insurance of the employees in the post-ACA period
makes good business sense. Health insurance being a major component of the employee

12
benefits, the study involves determination of critical input in redesigning the employee
benefits and developing appropriate talent management strategy in a globalized world,
where competition, especially from the Asian retail counterpart, is stiff.
Based on actual data, the results of the present study contains vital clues as to the
reason why a section of the employees in the retail sector of the Southern United States
business will decide to leave the employer-provided health coverage and buy health
coverage at the ACA marketplace. The findings of the current study will consequently
help the employers perform cost-benefit analysis and take strategic decisions relating to
redesigning the future health benefits package of the employees. The current research
study also contains important clues to the health care policy planners in the Southern
United States, to ensure all the stakeholders in the health care system sharing the cost of
health care of the nation equitably. Equitable sharing of the cost of the nation’s health
care is fundamental to the success of the ACA (Democratic Policy and Communication
Center, n.d.).
Purpose of the Study
Continuance of the employment-based health insurance is imperative for the
eventual success of the health care legislation (Haberkorn, 2011; Schoenman, 2013).
Expansion of health insurance coverage to millions of low-income Americans through
federal subsidies is a viable proposition because the majority of the Americans get health
insurance coverage through employment (Blumberg et al., 2011). If the employees, who
are already covered through the employer, migrate to the marketplace created under the
ACA and seek health coverage availing the federal subsidies, the problem will be serious
for the employment-based insurance system (Merhar, 2014; Regopoulos & Trude, 2004).

13
Migration of the employees from the employer-provided insurance to the ACA
marketplace will defeat the very purpose of the current legislation to extend insurance
coverage to millions of low-income Americans, who have no access to health coverage
through employment (Orentlicher, 2014; Troy & Wilson, 2014).
The purpose of the current quantitative study was to explore, if and to what
degree, a correlation exists between the ACA and migration of the retail employees in the
Southern United States, from the ESI to the ACA marketplace, utilizing a paper-based
survey of the front-line retail executives in the Southern United States. The researcher
employed the SPSS Predictive Analytics Software student version 18.0 to analyze and
interpret the survey data to draw conclusions. The result of the present study was
extended to other retailers operating in the Southern United States.
Employers have always evaluated the efficacy of workplace-based health
insurance from a cost-and-benefit perspective (Maxwell, 2012, p. 43). The most
important factor that could affect the employers’ decision to sponsor health insurance
coverage is the establishment of the marketplace under the ACA, as an alternative to the
workplace-based health insurance coverage. The outcome of the current study might
require the retail employers in the Southern United States to revisit the employees’
benefits portfolio and perform a cost-benefit analysis to ensure offering health coverage
is still relevant to attract and retain the type of workforce the retailers need. In addition,
the employees, who have been dependent on the employer-sponsored health coverage so
far, might have to look for alternatives available within means, in response to the
changing health care mandates. Based on actual data, evaluation of the reaction of the
employees to the employer-provided health insurance is critical in understanding the

14
success of the health care reform and relevance of the act to the employers, employees,
policy makers, and labor unions. The literature search in the area of the research topic led
the researcher to test the following hypotheses pertinent to the research problems.
Research Questions and Hypotheses
R1: What correlation, if any, exists between the ACA and the migration of the
retail employees in the Southern United States, from the ESI to the ACA marketplace?
H1: There is a statistically significant correlation between the ACA and the
migration of the retail employees in the Southern United States, from the ESI to the ACA
marketplace.
H0: There is statistically no significant correlation between the ACA and the
migration of the retail employees in the Southern United States, from the ESI to the ACA
marketplace.
R2: What correlation, if any, exists between age and the migration of the retail
employees in the Southern United States, from the ESI to the ACA marketplace?
H2: There is a statistically significant correlation between age and migration of
the retail employees in the Southern United States from the ESI to the ACA marketplace.
H0: There is statistically no significant correlation between age and migration of
the retail employees in the Southern United States from the ESI to the ACA marketplace.
R3: What correlation, if any, exists between ethnicity and migration of the retail
employees in The Southern United States from the ESI to the ACA marketplace?
H3: There is a statistically significant correlation between ethnicity and migration
of the retail employees in the Southern United States from the ESI to the ACA
marketplace.

15
H0: There is statistically no significant correlation between ethnicity and
migration of the retail employees in the Southern United States from the ESI to the ACA
marketplace.
R4: What correlation, if any, exists between family size and migration of the
retail employees in the Southern United States from the ESI to the ACA marketplace?
H4: There is a statistically significant correlation between family size and
marketplace.
H0: There is statistically no significant correlation between family size and
marketplace.
R5: What correlation, if any, exists between gender and migration of the retail
employees in the Southern United States from the ESI to the ACA marketplace?
H5: There is a statistically significant correlation between gender and migration
marketplace.
H0: There is statistically no significant correlation between gender and migration
marketplace.
In the current study, the researcher tested the null hypotheses using statistical
interpretation of the responses of the employees, who are eligible for employer-sponsored
health insurance coverage. The researcher designed the current survey to elicit responses
from the participants that allowed a quantitative test of the null hypothesis. Executives of

16
the retail chains and individual retail stores operating in the Southern United States
participated in the current survey. The researcher excluded from the study the restaurant
business, which is strictly not retailing. In the current study, the researcher utilized a
paper-based questionnaire (Appendix A) as the survey instrument. The retail executives
in the Southern United States are composed of people with varied skill sets and diverse
backgrounds. Several factors such as age, ethnicity, educational level, household income,
family size, and nationality affect the orientation of the employees concerning the
decision as to whether to accept the employer-offered health insurance, buy health
coverage at the ACA marketplace, or not to have health insurance at all, and pay the fine.
The researcher statistically analyzed and interpreted the current survey data to provide an
objective analysis of the employees’ attitude toward the employment-based insurance,
when the ACA contains provision for alternative health insurance coverage. In the
current research study, the researcher performed both descriptive and inferential
statistical analyses on the collected data to draw conclusions and generalize.
While emphasis in the current research study was to find answers to the above
questions, findings of the current study contained critical information regarding the
attitude of the employees toward several additional questions relevant to the current
research. Utilizing the questionnaire (Appendix A) the researcher elicited responses of
the participants to additional questions, such as if the employee will have at least some
form of insurance or not; participants’ liking and disliking for the type of coverage; and
the like. From the employees’ perspective, there is a probability that some of the
employees will not participate in any health insurance plan and pay the fine. The
employees considering not having insurance coverage might consider visiting the

17
federally supported Community Health Centers and other non-profit healthcare providers
and pay for the services based on sliding income scale. From the employers’ perspective,
the management might consider a trade-off between providing health insurance to the
employees and paying the fine. Whether the management will continue to consider
Employer-Sponsored Insurance a strategic component of employee benefit package for
recruiting and retaining a talented workforce was also part of the research focus.
Contribution to Knowledge
The researcher conducted the current research study at a point of time when the
full impact of the ACA on the American business was not apparent. As such, all the
arguments, whether in favor of or in opposition, are projections. Both employers and
employees of the corporate America are yet to have a complete understanding of the
implication of the current legislation. The predictions based on the studies carried out
concerning the decline in the workplace-based health coverage were before major
components of the ACA went into effect. The current health care legislation went into
effect starting January 1, 2014. The predictions as such were hypothetical in nature. The
present study, supported by actual data, explored if and to what degree, a correlation
exists between the ACA and migration of the retail employees in the Southern United
States, from the ESI to the ACA marketplace. The researcher conducted a quantitative
study utilizing a survey (Appendix A) of retail employees in the Southern United States.
The findings of the current study involved finding vital information concerning how the
ACA could influence the health insurance choices of the Southern United States retail
employees.

18
There is little research in the Southern United States concerning the impact of the
current health care legislation on the employees in retail sector of business. The findings
of the current study measured the attitude of the employers and the employees towards
the ESI and could form the basis of future research. The findings of the current study
contain clues as to why a section of employees in retail corporations would migrate to the
ACA marketplace. Additionally, the current study could provide critical information to
the employers to make a cost-benefit analysis to determine if retail corporations operating
in the Southern United States need to redesign the health benefits package offered to the
employees as part of the talent management strategy.
The current research study is also important to the policy planners in the field of
health care since the findings of the current study contain relevant information to ensure
there is equitable sharing of insurance cost among the stakeholders in the health care
system of the nation. Capturing what goes on in the mind of the employees concerning
the employment-based insurance could help the employers reassess the usefulness of
health insurance as a strategic component in managing the future workforce. Employers
have the option of either play (offer health insurance) or pay (the tax penalty). The study
contains information for the employer to take greater insight into both short-term and
long-term effect of either of the above choices. The current study in essence could help
employers take better judgment concerning the health care decision to ensure
competitiveness and sustainability in a globalized world.
Significance of the Study
Enactment of the current health care legislation in 2010 amidst fierce political
debate brings in major changes to the existing health care practices (Emanuel, 2014). The

19
crafters of the current legislation intend the legislation to capitalize on, and not to replace
the stable employment-based insurance coverage (Schoenman, 2013; Yale Journal of
Medicine and Law, 2009). The impact of the current legislation will be numerous for
both the employers and employees. The employers provide the health insurance to the
employees for strategic reasons (Blumberg et al., 2011), and the employees highly value
the employers assuming the responsibility of providing health insurance coverage and
peace of mind concerning health. Most of the provisions of the current legislation were
effective beginning 2014, and the proposed time line for full implementation of the act is
by 2018 (Kaiser Family Foundation, n.d.). The employers and the employees as such will
have to reconsider the relevance of the employment-based health insurance coverage.
The employers will reassess the cost structure relating to the health insurance
offer, the effect of such offer on the organizational bottom-line, and take into account
other strategic considerations in offering group health plan (NORC at University of
Chicago, 2014; Towers Watson & Co., 2012). The employees’ decision whether to
participate in the employer-sponsored group plan or make independent purchases of
health insurance in the marketplace, depends on whether the employers continue to offer
health insurance or not. Singhal, Stueland, and Ungerman (2011) noted the employers
needed to take a dynamic view of the reaction of both the competitors and the employees
toward the workplace-based health insurance coverage in the post-current legislation
period.
The present study contains valuable information for the employers in retail
business in deciding whether the employers should continue to offer health insurance to
the employees or not. The study could have information for the employers to understand

20
the changing health care landscape, who might even consider offering health coverage to
the full-time employees only, while strategically leveraging the part-time employees. An
accurate effect of the current legislation on the retail business is difficult to assess at
present since most of the current legislation went into effect in 2014 and full
implementation of the act might be complete by 2018 (Kaiser Family Foundation, n.d.).
Implementation of the major components of the act as per the timeline is also equally
important. Without much empirical studies, precise prediction of how employers and
employees would react to the current legislation is difficult. As such, any study in the
area is useful from the perspective of all the stakeholders operating in the field of health
care. In essence, through the present study, the corporate employers operating in retail
business could have better appreciation of the relevance of employment-based health
insurance in the changing health care landscape.
Rationale for Methodology
The current study required an objective answer to the question whether the
employees would accept the health insurance offered at the workplace or move onto the
ACA marketplace to buy the health insurance. The researcher employed a quantitative
research study over a qualitative one for the purpose, as the quantitative research method
leads to interpretation of the numerical data that is more concrete. State University of
New York at Cortland (n.d.) stated, “only quantitative data can be analyzed statistically,
and thus more rigorous assessments of the data are possible” (para. 1). The study
measured the variables to test the hypotheses. Results from a survey renders well to a
quantitative study (Social Science Research and Instructional Center, 1998). A carefully

21
designed survey could mimic the real life situation for an individual to decide the type of
insurance one should have.
A Likert-type scale, a nominal scale, and a category scale measured the responses
of the survey participants. The researcher systematically analyzed the quantitative
response data of the participants using statistical methods, leading to more meaningful
conclusion and predictions. The researcher was able to objectively interpret and
generalize the data through the study of quantitative data. In the context of the present
study, prediction of the behavior of the employees of retail business in the Southern
United States in general, was possible. A qualitative research study, opposed to a
quantitative one, is much more subjective (Imperial County Office of Education, 2006),
and objective assessment of subjective data is difficult.
Nature of the Study
This study is a quantitative study of employees’ response to the provisions of the
ACA. The study contains a practical insight into the impact of the employers’ decision
and the mandates of the current legislation on the employees’ decision in choosing
among the types of insurance coverage available. The researcher chose the retail chains
and individual retail stores in the Sothern United States. The results of the current study
contained information to extrapolate the results to other stores in the Southern United
States retail business. The study population was the front-line, floor level executives, who
are eligible to participate in the employer-sponsored health insurance coverage. The
researcher conducted a sample survey of 203 retail executives (Appendix B) in the
context of the current research problems. The researcher utilized a paper-based
questionnaire (Appendix A) as data collection tool. The researcher used both descriptive

22
and inferential statistics to perform statistical analyses of the primary quantitative data
obtained in the survey. The researcher employed the SPSS Predictive Analytics Software
(PASW) student version 18.0, to analyze and interpret the current survey data. Tables and
figures supported interpretations of the current data.
Definition of Terms
Affordable coverage. Coverage is considered unaffordable if the required
employee contribution towards the cost of self-only coverage exceeds 9.5% of the
employees’ household income. Coverage fails to provide minimum value if the coverage
fails to pay at least 60% of the total allowed cost of benefits provided under the plan
(HealthCare.gov, n.d.).
Actuarial value. An estimate of total average costs for covered benefits that a
plan will cover (American Association of Retired Persons, n.d.).
Annual out of pocket expenses. The maximum dollar amount a group member is
required to pay out of pocket during a year (U.S. Bureau of Labor Statistics, 2002, p. 5).
Cadillac health plan tax. Excise tax for carrying high-cost plans above specified
limits starting 2018 such as employers will be assessed 40% excise tax on the annual
value of employer provided health coverage exceeding $10,200 for individual coverage
and $27,500 for family coverage. The value of coverage includes both employer and
employee contributions (Gold, 2010; Justice, 2012).
Co-pay. A form of medical cost sharing in a health insurance plan that requires an
insured person to pay a fixed dollar amount when a medical service is received (U.S.
Bureau of Labor Statistics, 2002, p. 1).

23
Cost sharing. The charges for a covered health benefit that an insured person
must pay, such as a copayment, coinsurance, or deductible payment (American
Association of Retired Persons, n.d.).
Deductible. A fixed dollar amount during the benefit period that an insured
person pays-usually a year-before the insurer starts making payment for covered medical
services (U.S. Bureau of Labor Statistics, 2002, p. 1).
Employer mandate. Requirement that employers with more than fifty full-time
employees provide and contribute to the cost of health insurance for the employees or pay
a fine (Chaikind & Peterson, 2010; U.S. Chamber of Commerce, 2013).
Employer-sponsored health insurance. Health coverage an individual gets
through his or her (or a spouse’s) job, as an active or retired employee (American
Federal poverty level (FPL). A measure of income level issued annually by the
US Department of Health and Human Services. Federal poverty levels are used to
determine eligibility benefits and programs (American Association of Retired Persons,
n.d.).
Health insurance. A contract that requires the health insurer to pay some or all of
the health care costs in exchange for a premium (Centers for Medicare and Medicaid
Services, n.d.).
Health insurance exchange. Also called Exchange or The Marketplace is a
structured market place for the sale and purchase of health insurance. Marketplace, which
will be operating in states by Jan.1, 2014, will serve as a venue under ACA to provide
health insurance to an estimated twenty-nine millions of people by 2019 (Health

24
Insurance 101, 2011). Through the marketplace, one can shop online and receive help by
phone or in person to find the plan that works for his or her family. The marketplace
allows one to compare plans and costs on an apples-to-apples basis. One can also
determine what kind of financial help he or she may be able to obtain to pay for
premiums and copayments. Marketplace is sometimes referred to as Health Insurance
Exchange (American Association of Retired Persons, n.d.).
Individual mandate. Requirement that individuals have minimum essential
coverage or face a tax penalty (Baker, 2013; Cigna, 2013).
Migration absolute measure. Measure on a nominal/category scale of employees’
responses of likely participation in the employer-provided health insurance.
Migration ordinal measure. Measure on an ordinal scale of employees’ responses
of likely participation in the employer-provided health insurance.
Minimum essential coverage. The type of coverage and individual needs to meet
the individual responsibility requirement (Individual Mandate) under the Affordable Care
Act. This includes coverage bought in a Health Insurance Marketplace, job-based
coverage, Medicare, Medicaid, the Children’s Health Insurance Program (CHIP),
TRICARE, and certain other coverage (American Association of Retired Persons, n.d.).
Out-of-pocket costs. Health care or prescription drug costs that an insured person
must pay because Medicare or other insurance does not cover them. Out-of-pocket costs
include deductibles, coinsurance, and copayments for covered services that are not
covered by a health plan (American Association of Retired Persons, n.d.).
Out-of-pocket limit. The most a subscriber pay during a policy period (usually a
year) before the health plan begins to pay 100% of the allowed amount. This limit never

25
includes the premium, balance-billed charges, or health care the health plan does not
cover. Some health plans do not count all of the copayments, deductibles, coinsurance
payments, out-of network payments, or other expenses toward this limit (American
Patient Protection and Affordable Care Act. Also known as the Affordable Care
Act, president Obama signed into law on March 23, 2010, putting in place comprehensive
reforms that improve access to affordable health coverage for everyone and protect
consumers from abusive insurance company practices. The law allows all Americans to
make health insurance choices that work while guaranteeing access to care for our most
vulnerable, and provides new ways to bring down costs and improve quality of care
(Furman, 2014; The White House, 2013; Waldron, 2012).
Plan premium. Amount of money as agreed upon paid for coverage of medical
benefits for a defined benefit period (U.S. Bureau of Labor Statistics, 2002).
Retail executives. The term executives in the context of the current study refer to
the first-line supervisors such as floor level supervisors, managers, and leads in the
context of retail business. The term executives do not refer to the officers of the
companies, who have access to special corporate privileges.
Assumptions, Limitations, and Delimitations
The following assumptions were present in the current study:
1. The researcher assumed that the participants understood the provisions of the
current health care legislation.

26
2. The researcher assumed that the personal and economic behavior of the
individuals, doctors, patients, and other stakeholders in the health care system
would be rational.
3. The researcher assumed that there would be no material changes to the rules and
regulations of the current legislation.
Discussion of limitations of the current study is relevant in evaluating the true
merit of the study. The impact of the current health care legislation is chiefly predictive in
nature in the absence of any empirical research. The implementation of the current
legislation is not yet complete and the changes are not apparent. Most of the components
of the current legislation went into full effect in 2014 and the full implementation might
take place by 2018 (Kaiser Family Foundation, n.d.). Nothing is definitive at this point,
regarding what goes on in the mind of the employers, and the employees, toward the
current legislation. Answers to the research problems are as such partly conclusive and
partly predictive.
The retailers in the Southern United States greatly differ in the composition of
workforce and nature of business. Some of the corporate retailers employ employees with
greater knowledge-based skill sets compared to others. Corporate retailers that require
more knowledge-based employees are more likely to provide health insurance as a
business strategy for talent management and sustain productivity. The above fact will
restrain generalization of the conclusion based on the 203 sampled executives working as
front-line supervisors for the national retail chains and the individual retail stores.
However, the participants in this study sample are distributed and worked in varied store

27
types to represent the retail businesses in the Southeastern United States. The following
limitations were present in the study:
1. Limited resource availability did not allow the researcher to go for a larger sample
size. The sample size in the current study was 203 front-line retail executives.
According to Krejcie and Morgan, the ideal sample size at 95% confidence level,
drawn from the population of 577 retail executives identified in the Southern
United States would be between 226 and 234 (siegle, n.d.).
2. Lack of probability sampling was another limitation. In the process of obtaining
the targeted sample size of 200 front-line retail executives, the researcher used as
many as 97 shopping centers of the 109 identified. However, the survey of the
retail executives in the Sothern United States shopping centers, included varieties
of retail stores and appear in clusters, thus closely represent the characteristics of
the retail business in the Southern United States.
3. The researcher confined the current study to executives only and not considering
all the eligible employees in the current study population. Although the researcher
originally planned to include the employees in all categories, the idea was
dropped since the management considered the research topic sensitive now for all
categories of employees to participate. The researcher believes, in coming years
participation of all categories of employees in similar studies should not be a
problem. A detailed discussion of the limitations of the current study is provided
in the research methodology section (chapter 3) of the manuscript.
The current health care legislation changes the health care landscape of the nation.
Both employers and the employees will be mutually influenced by the decisions either

28
take. The current research study provides in general information regarding the impact of
the ACA on employers and employees in retail settings. The researcher explored if and to
what degree, a correlation exists between the ACA and the migration of the retail
employees in the Southern United States from the ESI to the ACA marketplace. The
study as such explored if and to what degree, the employees of big retail corporations,
and individual retail stores in the Southern United States will continue to participate in
the employer-offered insurance plan, rather than buying the coverage independently at
the ACA marketplace. The study conducted a sample survey of 203 floor level executives
working for retail chains and individual retail stores in the Southern United States. The
researcher employed statistical methods to analyze the current survey data to arrive at
conclusions and generalize. The following delimitations were present in the current
study:
1. The current study participants did not include employees working in the non-retail
environment and the would-be-entrepreneurs, who are trying to start self-owned
business in America.
2. While the study provided some insight into the overall impact of the ACA on the
corporate America in general, the current study did not investigate in detail the
way ACA could affect the corporations, which are not in retail business.
Summary
In conclusion, majority of the employees in the United States get the health
insurance coverage through the employers. The current health care legislation is the law
of the United States and will bring in sweeping changes in the health care system across
the nation. The current legislation will affect both the employers and the employees. The

29
employers will try to understand the impact of the current legislation and reposition to
address the issues brought about by the changes in the health care law. There is also
compelling reasons to understand the insurance purchasing behavior of the employees in
the changed health care scenario. The employees’ demand for the job-based health
insurance coverage is a function of premium prices, out-of-pocket-expenses, and the
quality of the plan offered by the employers. The federal government provides subsidies
in the ACA marketplace, the amount of which will also influence the health insurance
choices of the employees.
According to the Avalere Health LLC (2011) analyses, the micro-simulation
models estimates from the RAND Corporation, the Urban Institute, the Lewin Group, and
the CBO have concluded that the ACA would leave the health insurance coverage offered
at the workplace largely intact. According to Blumberg et al. (2011), some prominent
economists thought the incentive provision in the current piece of legislation could
induce a large-scale migration of employees from the employer-sponsored coverage,
while others forecasted a more modest migration of low and modest earning employees
to the marketplace. Blumberg et al. (2011) stated that the migration of the low and
modest earning employees would occur to take advantage of the publicly subsidized
coverage as premium contributions continue to increase. The actual influence of the ACA
on the ESI could however, result from how the employees value the workplace-based
health coverage over the alternative, the ACA marketplace.
As discussed in the preceding section, several surveys captured the reactions of
the employers in recent times. There is however, a need for analyses of additional data on
the employees’ responses to the provisions of the ACA with respect to specific industries

30
where the migration from employment based health care is very likely to happen. The
retail business is one such industry that employs a large fraction of the low-paid, low-
skilled employees. In the United States, the retail trade sector is the largest employer
(United States Department of Labor Employment and Training Administration, n.d.) and
employs about 15.5 million people (Lichtenstein, 2009; U.S. Bureau of Labor Statistics
(n.d.). If the retail sector of business ends providing health coverage, the health care cost
estimated in the Affordable Health Care Act will go up (Orentlicher, 2014; Schoenman,
2013). The current study focused on investigating the aspect of employee response to the
ESI under the current legislation, which is missing.
Concerning the remainders of the manuscript, chapter 2 contains a comprehensive
review of the scholarly contribution in the area of the research topic. The review of the
current literature thematically provided the body of knowledge relevant to the present
study and placed the study in right context. The section provides the reader an easy
understanding of the progression of the employer-sponsored health care system over the
years and how the legislation influences the employers and the employees. Chapter 3
includes the research methodology, the research design, and the procedures adopted in
the current study to investigate and measure the reaction of the front-line retail executives
towards the employer-offered health insurance coverage. Chapter 4 contains an
explanation concerning the current survey data analysis and interpretation. Finally,
Chapter 5 includes the interpretation of the results and the probable implications of the
findings on the retail employees in the Southern United States along with a few
recommendations.

31
Chapter 2: Literature Review
An Overview of the Chapter
The objective of the current study was to examine if the employees’ perception of
the employer-sponsored health insurance coverage will change after the health care
current legislation. The employees might prefer the health coverage provided at the ACA
marketplace to the traditional health insurance coverage available at the workplace, job-
based health coverage has been the way of life for the American workers since the
Second World War, although the coverage is steadily declining since the 1980s
(Enthoven & Fuchs, 2006; Schoenman, 2013). The success of the current health care
legislation depends on the smooth continuance of the ESI coverage (Schoenman, 2013).
If the ACA drives the employees to sign up for the health coverage at the ACA
marketplace instead of accepting the health coverage at the workplace, the job-based
health coverage will further weaken leading to ultimate demise of the employment-based
health coverage (Ubel, 2013). The employees, as such, through reactions toward ESI,
provide important clues to assess the future of the ESI and consequently, the ultimate
success of the health care reform current legislation.
A thorough review of the literature in the area of employment-based health
coverage was necessary for a comprehensive understanding of the health care system in
the United States. The origin and evolution of the health care system over the years
provided a justification for the present enquiry. The body of literature provided patterns,
trends, issues, and controversies concerning the health care system of the nation. The
researcher thematically searched the scholarly contributions in the topic area through key
phrases such as the employment-based health insurance, the Affordable Care Act, and the

32
impact of the affordable care act on the employers and the employees. The review of the
literature highlighted the study findings, opinions, controversies and the research gap in
the research area, which formed the starting point of the present study.
This study was an evaluation of the health care system of the nation and the health
coverage decisions of the individuals and other stakeholders in the health care system,
within a multi-conceptual framework. Although rational choice theory is dominant in
understanding and modeling the health insurance decisions, theory often fails to explain
adequately the behavior of the individuals. The underlying assumption in theory is that
individuals are rational, and the individuals try to optimize the wellbeing by maximizing
benefits and minimizing costs. Insurance business in general capitalizes on uncertainties
and individuals have limited information for precise evaluation of health related risks.
The rational choice theory as such fails an explanation concerning certain types of
behavior patterns the individuals expressed (Niankara, 2006). Theory of bounded
rationality, which is limited by availability of information, cognitive abilities, and time
and resource, better explains the rationality of individuals and understanding of health
insurance decisions by individuals (Hindle, 2009).
The Affordable Care Act embeds in the pluralistic concepts of health insurance
that reflect the multi-cultural Americans of varied socio-economic make-up. According
to Hoffman (2011), the ACA is reflective of the conceptual pluralism underlying the
policies of the current legislation and matches the aspirations of the Americans, who
largely vary in the conception of health insurance. Most of the political and philosophical
concepts, such as political justice, distributive justice, and capability approach are
consistent with the idea that all individuals deserve high quality health care equally. The

33
above political and philosophical concepts considerably influence the health care
landscape of the nation and provide a framework in reshaping the health coverage
landscape of the nation. Davis and Walter (2011) noted that the principle of fair equality
and opportunity by Daniels et al. is an extension of theory of justice as fairness originally
proposed by Rawls. Individual health, according to Daniels et al, makes a significant
contribution to protecting a range of opportunities open to all individuals. The principle
of fair equality and opportunity provides justification for distribution of social resources
with special emphasis on improving the position of the less fortunate individuals in the
society and reduces disparities in health care access (Cust, 1993; Davis & Walter, 2011).
The above aside, Sen and Nussbaum, proponents of the capability approach,
provide a second moral foundation, which refers to the constitutional principles that the
government should provide basic health care to all, in order to ensure adequate respect
for human dignity. The capability approach by Sen and Nussbaum (as cited in Davis &
Walter, 2011; Stanton, 2007) forms the basis of the human development index developed
by the United Nations (Davis & Walter, 2011; Stanton, 2007). The theory provides
justification that the society should pursue for all people the human capabilities, such as,
the freedom to achieve functioning, which allows an individual to pursue what he or she
wants to do, and wants to be (Davis & Walter, 2011). According to Nussbaum work (as
cited in Davis & Walter, 2011), the health of an individual provides the foundation for
other pursuits of life, and the government as such should promote health care for all, to
ensure all people meet the minimum standard of capability (as cited in Davis & Walter,
2011). Knadig put forth the argument by John Rawls that a society in which the most

34
fortunate help the least fortunate is not only a moral society, but also a logical society (as
cited in Sorrell, 2012).
Theoretical and Conceptual Framework for the Current Study
The United States senator from Massachusetts Edward Kennedy (as cited in
Knadig, 2011) stated:
While the explicit ethical justification is that health reform is decisive for the
nation’s future prosperity, health coverage is above all an ethical issue; at stake
are not just the details of policy, but fundamental principles of social justice and
the nation’s character…What we face is above all a moral issue; at stake are not
just the details of policy, but fundamental principles of social justice and the
character of our country. (p. 11)
The ACA embeds in a multi-conceptual framework to meet the desires of the
heterogeneous American population, marked by varied social, economic, and moral
standing. According to Hoffman (2011), there are three dominant theories to the
American conception of health insurance. The first theory propounded by Pender (as
cited in University of Michigan, n.d.) is that health insurance should promote health.
Theory requires spending the insurance dollars on the medical interventions to produce
the most health benefits for dollars spent, contrast to lower-value interventions such as
end-of-life care. The second theory propounded by Graetz and Mashaw (1999) is that
health insurance should mitigate financial vulnerabilities resulting from health care
spending. Theory requires providing financial security to the Americans against medical
bankruptcies. The third theory is the classic image of liability insurance, which protects
the insured against health risks, which the insured might not reasonably avoid. Hoffman

35
(2011) stated that the above three overlapping conceptions of health insurance could
work in unison to reflect the policies of the ACA, that conceptualizes multiple visions.
The concept of health insurance did not exist less than a century ago in the United
States (Hermer, 2006). As the field of medical science advanced rapidly through
research, and the hospitals started offering health care to patients, the cost of health care
kept on increasing. According to Hermer (2006), in the United States the concept of
health insurance did not start until 1929. Health insurance, just like all other forms of
insurance, operates on the concept of risk. The insurance companies underwriting the risk
recognize the fact that the insurance companies could spread the risk over large number
of individuals. In a given year, only a fraction of the individuals will require treatment
and others will not. The premium collected from the individual subscribers will be
enough to pay for the cost of treatment in a given year. The insurance companies vary the
premium among the individuals based on the age, medical history, and habits, to ensure
individuals pay the premium based on the recognized risks the individuals pose. The
current legislation however restricts insurance companies to charge higher premium to
people with pre-existing conditions, and to put a cap on the total lifetime benefits
(HealthCare.gov, n.d.).
Ruger (2007) stated that the neo-classical economic perspective provides
justification for health insurance coverage with the assumption that individuals make
rational decisions to maximize the preferred outcomes, and corporations, including the
ones in insurance business, operate to maximize profit. The employers and the employees
as such make cost-benefit analysis to maximize the outcome of the insurance decisions.
United States, which is based on a free market economy, ensures the best form of

36
resource allocation and efficiency (Economy Watch, 2010). The risk-averse individuals
should be able to assess the risk in a rational manner. The individuals however do not.
According to Roll’s work (as cited in Bruner, n.d.), the individuals, based on empirical
studies, do not always make rational choices concerning the risks (as cited in Bruner,
n.d.). Ruger (2007) noted that most individuals fail to segregate between the greater risks
from the smaller ones to optimize the preferred outcomes.
Dacher (n.d.) stated that from moral perspective, the Aristotelian concept of
human flourishing, which assumes an innate potential of each individual to live a life of
enduring happiness, penetrating wisdom, optimal well-being, and authentic love and
compassion, provides the moral foundations of health insurance. If Aristotelian concept
of human flourishing is the end goal, then not just treating the sick, but providing security
for the vulnerabilities of the individuals through provision of health insurance is a moral
necessity. The political goal as such in the context should be developing public policy to
minimize the loss from individual health vulnerabilities.
Within the framework of neo-classical economic model, any social welfare rests
on the individual’s willingness to buy the commodity, such as health insurance, to reduce
the vulnerabilities. An alternative to the neo-classical economic model is the ‘welfare
economics and the capability approach’ propounded by Sen (Kuklys, 2005). According to
Sen, an individual’s access to the means, when exposed to such risks, is integral in
managing the risks adequately (as cited in Deneulin, Nebel, & Sagovsky, 2006). The
welfare economics and the capability approach, which emphasizes on capacitating the
vulnerable by providing access to means, has a moral dimension in addition to the
individual preferences to optimize the outcome of preferences through rational decisions.

37
Lack of access to the means to mitigate risks makes people insecure, diminish well-being,
and impede human flourishing (Dacher, n.d).
Several principles in medical ethics also support right to health care and equal
access. From the perspective of right to health care and equal access, a march towards
universal health care is laudable and justified (as cited in United States Conference of
Catholic Bishops, 1993). A resolution of Catholic Bishops of the United States reasoned
that every person has a right to adequate health care. The right flows from the sanctity of
human life and the dignity that belongs to all human persons, who are made in the image
of God. “Health care is more than a commodity; it is a moral imperative; it is a basic
human right; an essential safeguard of human life and dignity” (United States Conference
of Catholic Bishops, 1993, p. 1).
Review of Relevant Scholarship
Employment-based insurance. The employment-based health insurance system
has assumed a dominant position in providing health coverage to the vast majority of
Americans for more than half a century since 1950s (Collins, White, & Kriss, 2007;
Reinhardt, 2013). At the same time, the ESI has undergone several structural changes
such as the design and the cost, leading to drop in the rate of coverage. The employers
have always looked for ways to redesign insurance coverage in response to the rising cost
of health care (Bernstein, 2009). Keeping with the rising cost of health care, the trend has
been increased insurance premium and increased cost sharing such as copay and
coinsurance (Cutler, 2003; Komisar, 2013; RAND Corporation, 2011; United States
General Accounting Office, 1997). Between 2000 and 2010, the share of non-elderly
population with the employer-provided health insurance coverage in the United States

38
has dropped from 69.2% to 58.3%. Figure1 contains the description of the decline in the
ESI coverage between 2000 and 2010.
Figure 1. Share of the Under 65 Population with Employer-Sponsored Health Insurance,
2000-2010. Adapted from “Employer Sponsored Health Insurance coverage continues to
decline in a new decade”, by Gould Elise, 2012, Economic Policy Institute. Reprinted
with Permission (Appendix C).
Employers’ motivation for offering health insurance. The employers’
motivation to offer health insurance coverage to the employees arises from a number of
considerations. First, the employers want to recruit and retain the best in the market to
stay competitive. However, the employers may not look at the employer-sponsored health
insurance benefit the same way as the employers used to, with the ACA marketplace
running effectively. Availability of a viable and robust marketplace under the ACA might
do away with the employers’ motivation to provide health insurance to the employees
(Avalere Health LLC, 2011). Second, the fact that the employment-based health

Dissertation manuscript jeetendra dash

Dissertation manuscript jeetendra dash

Recomendados

Recomendados

Mais conteúdo relacionado

Destaque

Destaque (17)

Semelhante a Dissertation manuscript jeetendra dash

Semelhante a Dissertation manuscript jeetendra dash (14)

Dissertation manuscript jeetendra dash