Employer-Provided Health Coverage Declined over Decade

By Stephen Miller, CEBS Apr 18, 2013

The percentage of Americans who receive health insurance through employers fell significantly over the past decade, from 69.7 percent in 2000 to 59.5 percent in 2011, according to a new reportby the nonprofit Robert Wood Johnson Foundation.

The report revealed that 11.5 million fewer Americans received health coverage through their job or a family member’s job than did at the start of the century. In 2000approximately 170.5 million Americans were enrolled in employer-sponsored health insurance, compared with 159 million in 2011.

“Employers continue to shoulder about the same percentage of costs for employees’ health insurance as they did 10 years ago, but everyone’s costs have increased dramatically,” said Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation. “Higher costs naturally translate into fewer employers offering insurance coverage and fewer employees accepting it, even when it is offered.”

The report was prepared by researchers at the University of Minnesota’s State Health Access Data Assistance Center (SHADAC), using government survey data. The findings reveal that:

  • Fewer employers offer health coverage, and fewer employees accept it.Nationally, the percentage of private-sector employers offering coverage fell more than 6 percentage points, from 58.9 percent in 2000 to 52.4 percent in 2011. The number of workers choosing to take advantage of employer-sponsored coverage fell significantly, too. In 2000, 81.8 percent of employees who were offered such coverage enrolled; a decade later, just 76.3 percent did.

  • Costs of insurance premiums have risen dramatically. Researchers attributed the lower take-up rate to higher premiums and out-of-pocket expenses, among other factors. Nationally, the average annual premium for employee-only coverage doubled from 2000 to 2011, increasing from $2,490 to $5,081. Family premiums increased 125 percent—from $6,415 to $14,447—in the same period.

  • The share of premiums paid by employees rose slightly, but the dollar amount of worker contributions more than doubled.The average share that employees pay for individual and family coverage remained relatively constant from 2000 to 2011. For individual coverage, employees' premium share rose from 17.5 percent to 20.8 percent; for family coverage, employees' contributions increased from 23.8 percent to 26.6 percent. However, due to the rising cost of group-health premiums overall, the average dollar amount of employees' premium contributions jumped from $435 to $1,056 for single coverage and from $1,526 to $3,842 for family coverage.

  • More adults ages 19-25 are covered through employer-sponsored insurance.For these young adults,employer-provided "dependent" coverage increased by nearly 6 percentage points, from 30.7 percent in 2000 to 36.5 percent in 2011. The researchers attribute this to the Patient Protection and Affordable Care Act's provision (in effect since 2010) that allows children to remain on their parents’ health insurance policies until they reach age 26, regardless of student status, marital status or financial support by the employees.

  • Insurance rates vary significantly across states. Thefive states that saw the largest percentage-point drops in employer-sponsored insurance from 2000to 2011 were Michigan (-15.2 points), South Carolina (-14.9 points), Indiana (-14.8 points), Ohio (-13.7 points) and North Carolina (-13.3 points). Enrollment remained statistically stable, during the time of the study, in just three states: Alaska, Massachusetts and North Dakota. No states saw increases in employer-sponsored coverage.

  • People with lower incomes are most affected.In households with income at or above about $89,400 annually for a family of four in 2011 (400 percent of the federal poverty level, or FPL), employer-sponsored insurance dropped just 2.8 percentage points. In contrast, it fell by 10.1 percentage points for those with household incomes below $44,700 for a family of four (200 percent FPL).

The availability of state health insurance exchanges with government-subsidized coverage for low-income employees, along with expanded Medicaid eligibility, is expected to further the trend away from employer-sponsored coverage, researchers believe, although the extent to which the decade-long decrease might accelerate remains to be seen.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

Related SHRM Articles:

Fewer Health Plans Retain Grandfathered Status, SHRM Online Benefits, April 2013

On Private Health Exchange, Choice Drives Satisfaction, SHRM Online Benefits, March 2013

Let Strategy Guide Health Benefits Decisions, SHRM Online Benefits, March 2013

Levers of Change: Employers Respond to Shifting Landscape, SHRM Online Benefits, March 2013

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