Fewer People Receiving Health Insurance from their Employer

The percentage of workers with coverage provided by their employer has been declining, according to a study conducted by Employee Benefit Research Institute (EBRI).

The percentage of individuals under age 65 with employment-based health benefits fell from 62.4 percent in 2008 to 58.7 percent in 2010 even though the number of individuals working for employers that provided a health plan increased, according to the EBRI study.  In 1997, 79.8 percent of workers were employed by firms that sponsored health plans, and by 2002 that had increased to 81.1 percent.

The percentage of workers with health benefits provided by the employer of another family member declined as well EBRI reported. In 1997, 20.4 percent of workers had employment-based coverage provided by the employer of another family member. By 2010, 18.2 percent had coverage from the employer of another family member.

 Firms of All Size Reducing Insurance Availability

 Interestingly, it seems to be employees of both larger firms as well as small firms are losing access to employee sponsored health insurance coverage. The percentage of workers in firms with 100 or more employees who reported that their employer no longer provided health insurance fell about 4 percent from 1997 to 2010, according to the EBRI study.

Smaller firms, however, are much more likely not offer insurance. In 2010, 39.4 percent of workers in firms with fewer than 25 employees were offered health benefits.  This percentage fell by about 8 percent since 1997.

 Causation for Reduction in Coverage

 There are three main reasons why workers would not have coverage from their own employers:

(1) the employer does not offer coverage, (2) the employee is not eligible for coverage, or (3) the employee declined coverage for which he or she was eligible.

In 2010, 46.7 percent of wage and salary workers ages 18–64 reported that they worked for employers that did not offer health benefits. Another 14.7 percent worked for employers that provided health benefits but were not eligible for those benefits. One-quarter (25.2 percent) reported that they were offered health benefits but chose not to participate, according to the EBRI study.

Workers were much more likely to report that they were not eligible for health benefits because they worked part time. Of workers who did not have coverage, 67.2 percent reported that they were ineligible because of their part-time status in 2010. Between 1997 and 2010, the percentage of workers reporting that they were not eligible for health coverage because they worked part time increased from 51 percent to 67.2 percent the EBRI report stated.

Among those reporting that they declined coverage, an increasing number reported that the plan was too costly. Roughly 29 percent reported that their employer’s plan was too costly, and another 2.2 percent reported either that they did not need insurance or that they did not want insurance. Since 1997, the percentage reporting that they declined coverage because their employers’ plans were too costly increased from 23.2 percent to 29.1 percent.

 Trend Increases the Number of Uninsured

 Workers whose employers do not offer health benefits are more likely to be uninsured, the EBRI report concluded.  In 2010, 50.5 percent of workers whose employers did not offer health benefits were uninsured, up from 44.1 percent in 1997.  Among workers who were not eligible for their employers’ health plans, 38.7 percent were uninsured in 2010.