ACA & The New Nromal

More Workers Eligible for Employment-Based Health Coverage Following Passage of Affordable Care Act...

Despite stagnant employer offer rates

A new Employee Benefit Research Institute (EBRI) study finds the number of workers eligible to receive health coverage through their job rose from 2014 through 2018, despite offer rates slowly declining. Visit here to access the paper.

The EBRI Issue Brief, “More Workers Eligible for Health Coverage Despite Lack of Growth in Employer Offer Rates,” examines the percentage of employers offering health insurance from 2008–2018 to better understand how health insurance offer rates may have been affected by the Patient Protection and Affordable Care Act of 2010 (ACA) in addition to the Great Recession of 2007–2009 and the subsequent economic recovery.

“Despite the lack of an increase in offer rates, the percentage of workers eligible for health coverage through their job continued its upward trend,” said Paul Fronstin, director of the Health Research and Education Program, EBRI. “Between 2014 and 2018, the percentage of workers eligible for health coverage increased from 75.4 percent to 78 percent. We believe this increase is likely due to changes in the composition of the work force. We found a shift to full-time employment, fewer workers considered low-wage, and a shift to larger firms.”

The Issue Brief also explores the future implications of the Trump administration’s final rule to expand the use of stand-alone health reimbursement arrangements (HRAs) by employers of all sizes.

Summary

This paper examines the percentage of employers offering health insurance from 2008–2018, with a focus on 2013–2018, to better understand how health insurance offer rates may have been affected by the Patient Protection and Affordable Care Act of 2010 (ACA) in addition to the Great Recession of 2007–2009 and the subsequent economic recovery. The data come from the Medical Expenditure Panel Survey – Insurance Component (MEPS-IC).

Since 2013, the percentage of employers with 1,000 or more employees offering health benefits to workers has been consistently near or above 99 percent, but smaller establishments have shown a steady, though not precipitous, decline in offer rates...

Many employers were expected to drop workplace health insurance with the introduction of the ACA, and some have done so. Since 2013, the percentage of employers with 1,000 or more employees offering health benefits to workers has been consistently near or above 99 percent, but smaller establishments have shown a steady, though not precipitous, decline in offer rates. For the smallest employers studied, those with fewer than 10 employees, the offer rate declined from 28 percent in 2013 to 21.7 percent in 2016.

However, in 2017, the overall percentage of private-sector employers offering health benefits increased for the first time since 2008. In 2008, 56.4 percent of private-sector employers offered health benefits. By 2016, it was down to 45.3 percent. It then increased to 46.9 percent in 2017. Yet, the increase in offer rates did not continue in 2018.

Despite the lack of an increase in offer rates, the percentage of workers eligible for health coverage through their job continued its upward trend. Between 2014 and 2018, the percentage of workers eligible for health coverage increased from 75.4 percent to 78 percent. This increase was likely due to changes in the composition of the work force. We found a shift to full-time employment, more workers employed in firms with union employees, fewer workers considered low-wage, and a shift to larger firms.

There were years before 2017 when offer rates increased in various specific establishment size segments, perhaps due to the strengthening economy and lower unemployment rates.

Between 2017 and 2018, the increase in offer rates did not continue for most employer sizes. They increased slightly for employers with 10–24 employees, 100–999 employees, and 1,000 or more employees. They fell slightly for those with fewer than 10 employees and 25–99 employees.

This paper discusses the context for the recent trends and suggests factors that may influence future trends.