The budget office analysis found that the law, in effect, nudges workers to work less. The insurance expansion reduces the need for a person to take a full-time job just to get coverage. The premium subsidies effectively bolster household income. Higher taxes for richer households also reduce the incentive to work.
But it will also have an effect on businesses, the report said, including by encouraging them to reduce employee hours to avoid the “employer mandate.” The overall demand for labor would not change, in other words, but businesses might arrange their workers’ schedules differently to avoid having to provide them with health care.