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Why more workers blew off employer health coverage

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U.S. group health plans may be losing market share in spite of employer efforts to maintain and improve health benefits packages.

Joelle Abramowitz, an analyst at the Census Bureau, has published data supporting that possibility in a comparison of bureau Current Population Survey data from March 2014 and March 2015.

Abramowitz looked at survey data on the percentage of workers who said they were offered group health benefits, the percentage who found they qualified to sign up for benefits, and the percentage who took up the benefits offered.

Abramowitz also looked at data on workers’ reasons for refusing to take up group health benefits.

Related: PPACA employer mandate may start two-step fights

Originally, the 2010 Patient Protection and Affordable Care Act (ACA)of was supposed to require large employers to offer group health benefits, or else pay a penalty, starting in January 2014. Regulators put off enforcement of the employer “shared responsibility” penalty. The U.S. Department of Health and Human Services and the Internal Revenue Service are just now getting ready to impose penalties.

The ACA was also supposed to set up a small-group equivalent of the ACA public health insurance exchange. Public exchanges do operate Small Business Health Options Program divisions in most states, but overall sales appear to be low. The Obama administration has never published comprehensive small-group exchange enrollment figures.

Related: PPACA small-group exchange program fights for life

Federal Bureau of Labor Statistics surveys show little change in private-sector group medical coverage offer and take-up rates between 2014 and 2015.

The Menlo Park, California-based Henry J. Kaiser Family Foundation has published survey data of its own suggesting that the percentage of firms with 200 or fewer employees offering health coverage may have fallen to 45 percent in 2015, from 47 percent in 2013, while the percentage of larger firms offering coverage may have increased to 63 percent, from 62 percent, over that period.

The McMurray, Pennsylvania-based Mark Farrah Associates has reported that enrollment in fully insured large-employer plans appears to have fallen 12.5 percent between 2013 and 2015, and that enrollment in small-group health insurance plans has fallen about 20 percent over that same period.

For a look at what Abramowitz found when she looked at worker survey data, read on:

A healthier economy and publicity about the ACA may have helped boost employer health coverage offer rates in 2015.

1. Employers were more likely to offer the workers group health coverage in 2015.

The percentage of all surveyed workers who said they were offered employer-sponsored health coverage increased to 78.8 percent in 2015, from 78.3 percent a year earlier.

The coverage offer rate increased to 58.6 percent at firms with fewer than 100 employees, and to 91.1 percent, from 90.4 percent, at larger firms.

The offer fell to 82.7 percent, from 82.9 percent, for workers ages 46 and older, but it increased to 64.4 percent, from 62.3 percent, for workers ages 15 to 25, and to 80.3 percent, from 79.8 percent, for workers ages 26 to 45.

Related: Forget raises, employers lean on health benefits to retain workers


Waiting periods and other plan features kept fewer workers out of their employers’ health plans in 2015. (Photo: Allison Bell/LHP)

2. Workers were more likely to qualify for the group health coverage their employers offered in 2015.

Starting with group health insurance sold on or after January 2014, the Affordable Care Act and federal ACA regulations banned or limited the use of many provisions that once reduced workers’ ability to participate in their employers’ health plans.

Abramowitz found when she looked at the Census Bureau worker that the percentage of workers who said they believed they were eligible for their employers’ coverage increased along with the percentage who said they were offered coverage.

The overall eligible rate rose to 71 percent in 2015, from 70 percent a year earlier.

The eligibility rate increased between 2014 and 2015 for every group of workers in Abramowitz’s analysis.

The increase was biggest for workers ages 15 to 25. For the workers in that age group, the percentage eligible for their employers’ health coverage climbed to 44.9 percent in 2015, from 41.8 percent just a year earlier.

Related: IRS posts final PPACA affordability regulations 


The percentage of workers who turned down offers of health coverage rose in 2015. (Photo: Thinkstock)

3. Workers were less likely to take up the group health coverage they could have taken up.

The percentage of workers who took the coverage their employers offered fell to 79.4 percent in 2015, from 80.9 percent in 2014.

Because of that decrease in the take-up rate, the percentage of surveyed workers with group health coverage fell 0.4 percentage points — to 54.3 percent in 2015, from 54.7 percent in 2014.

The drop in the take-up rate was a little bigger at larger employers than at smaller employers, and it was much bigger for younger workers than for older workers.

The take-up rate among workers ages 15 to 25 fell to 52.4 percent, from 55.9 percent.

Workers who declined employer coverage were a little more likely in 2015 to say they had traded access to coverage for higher pay, but they were much more likely to say they decided to stick with Medicaid or individual health coverage.

About 5.7 percent of the workers who declined employer coverage in 2015 had Medicaid coverage, up from 4.2 percent in 2014.

The percentage who had individual commercial coverage increased to 10.9 percent, from 7.7 percent the year before. 


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