The Effect of the Affordable Care Act Dependent Coverage Mandate on Health Insurance and Labor Supply: Evidence from Alternative Research Designs

Abstract

This article examines the effect of the Affordable Care Act (ACA) dependent coverage mandate on health insurance and labor supply. The author applies three research designs—difference-in-differences, regression discontinuity, and regression kink designs—and conducts extensive robustness checks and falsification tests, along with a formal test for the location of discontinuity and kink. The author finds no discernible evidence of the labor supply impact of the ACA dependent coverage mandate during the first three years after its implementation (2011–2013), despite its substantial impact on health insurance coverage for the eligible young adults. The author attributes this finding to the fact that until 2014, grandfathered plans were not required to provide dependent coverage to those young adult workers who obtained insurance through their own employer.