Dependent Coverage and Parental "Job Lock": Evidence from the Affordable Care Act

In 2010, the Affordable Care Act (ACA) mandated that private insurance plans extend coverage to adult dependents under the age of 26. We hypothesize that this policy may have had the unintended consequence of increasing "job lock" among parents who would otherwise leave their employer. We use a large panel of insurance claims that links members covered by the same plan and follows individuals over time. To identify the effects of additional dependent coverage provided under the ACA, we estimate a regression discontinuity design in dependent birth date that exploits the fact that, on average, adult dependents born in January became eligible for more months of coverage than those born in December. We first show that, compared to their December-born counterparts, dependents with January births were more likely to enroll in their parent's plan and enrolled for a longer period of time. Correspondingly, we find that their parent is more likely to remain with their pre-ACA employer and remain with that employer for longer. Effects are larger for parents approaching early retirement and dependents who are only children. Our findings provide new insight into the welfare effects of mandated insurance coverage and the importance of intra-family spillovers.