Study: Fewer employers are offering health insurance

The Hill’s Sam Baker flags new research from the Employee Benefits Research Institute that shows people aren’t just losing insurance because they’re losing their jobs. Instead, some Americans are losing coverage because fewer employers are willing to foot part of the bill.

In 2002, 72 percent of employers offered health insurance—a number that dropped to 67.5 percent in 2010. Even among those who offered for coverage, fewer employees opted to participate in the program. The take-up rate for employer-sponsored insurance fell just slightly, from 86 percent in 1997 to 86.3 percent in 2010.

“The majority of uninsured workers report that they are not covered by health benefits because their employers did not offer coverage,” EBRI’s Paul Fronstin notes. “In 2010, 58.2 percent of uninsured workers reported that they worked for employers that did not offer health benefits to any employees This is up from 53.1 percent in 1997.”

So far, it’s mostly smaller firms that are moving away from offering insurance. These firms tend to face higher premiums, since they have a smaller pool of subscribers, and also have, historically, been less likely to offer cover. They’re dropping coverage in relatively small numbers. The more dramatic changes in employer-sponsored insurance are likely to come in 2014, when the government begins offering subsidized insurance to those who earn less than 400 percent of the Federal Poverty Line.

There’s long been a concern that employers will “dump” their employees when that happens, sending them into federally-subsidized insurance rather than providing such a subsidy themselves. It would, after all, be cheaper for a company to have the government subsidize their employees’ health insurance than cover it themselves. Others, however, argue that there’s a big downside to such a strategy: An employer who doesn’t offer benefits might lose employees to a competitor who does.

However, given that employers are already moving away from offering health insurance, it’s possible that workers will have lower expectations of receiving health insurance through their workplace. If so, more employers could decide to drop coverage in 2014 when the public subsidies come online.