Healthcare Coverage Still Strongly Linked to Employment, Despite Declines

Fewer workers signing up for health benefits at work, according to a report released by EBRI

The rate at which employees are offered healthcare benefits—and the rate at which they enroll—are both in decline, according to a report released in July by the Employee Benefit Research Institute.

Although fewer workers are offered and enrolled in employer-sponsored health benefits, EBRI noted that the link between health coverage and employment is still strong. Over 58% of people under age 65 are covered by a health plan through their job. That included 68% of workers and 35% of nonworkers.

“Because of the linkage between employment and access to health coverage, the likelihood of a worker being uninsured is tied to the strength of the economy and the unemployment rate,” Paul Fronstin, author of the report, wrote.

The percentage of people covered by health plans through their employer stayed relatively steady between 1996 and 2007, bouncing between just under 60% and to almost 62% in that time period. After the recession began, coverage fell from 60% to 57% in May 2008. Employment-based coverage continued to decline even after the recession technically ended and recovery began. By October 2011, 55% of workers were enrolled in employer-sponsored health plans.

The percentage of workers covered as dependents also fell, EBRI found. After increasing in the late '90s, then fell steadily from 18% in 2000 to between 16% and 17% by the end of 2007. It remained relatively stable between 2007 and July 2009, wavering between 16.6% and 17.9%.

“It appeared that the increase in dependent coverage during this period offset the decline in coverage that workers received through their own jobs,” Fronstin wrote. “During the post-August 2009 period, when coverage through workers’ own jobs appeared be starting to recover, the percentage of workers with coverage as dependents declined, slipping to 17% by December 2009 before increasing slightly to 17.9% by September 2011.”

Fronstin attributed the growth in dependent coverage prior to 2011 to the decrease in workers’ own coverage.

Most uninsured workers cited cost as their reason for not enrolling. Since 2009, the percentage of uninsured workers who don’t enroll in health insurance plans because they are too expensive has remained near 90%.

In 2001, about 40% of workers said they weren’t offered insurance benefits at work. By the end of 2011, that percentage fell to 22%. Less than 10% of workers said they are ineligible for workplace benefits because they don’t work enough hours or were recently hired, or simply declined because they didn’t think they needed it.

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