Report Shows Decline in Employer Health Coverage

According to the report, among employed individuals, the percentage covered by employer plans dropped from 76.0% in 1997 to 70.2% in 2010. Those not in the work force—people without jobs not currently looking for work—saw a change of 45.4% to 38.6%. For unemployed individuals—people without jobs actively seeking employment —the rate fell from 33.5% to 30.8%.

Hubert Janicki, an economist with the Census Bureau’s Health and Disability Statistics Branch, clarified how individuals who are not employed could be covered by employment-based health insurance, saying: “Unemployed and individuals not in the labor force with employment-based coverage were generally covered by a previous employer’s plan or someone else’s, such as a spouse’s or a parent’s employer.”

The study found that family income was a strong predictor of working for an employer that offers any health insurance benefits: Individuals with family income less than 138% of the federal poverty level were the least likely (43.3%) to work for an employer that offered health insurance benefits, and those with family income 401% and above of the federal poverty level were the most likely (80.9%) to work for an employer that offered health benefits. The federal poverty level for a family of four was $22,113 in 2010.

The report cited several reasons for nonparticipation in an employer’s health insurance plan. Half (50.4%) of nonparticipating workers whose employer offered health insurance benefits declined coverage by choice. While two-thirds of these (66.4%) declined coverage because they were receiving health care insurance from another source, more than one-quarter (27.4%) opted out due to cost. Roughly one-third of nonparticipating employees—37.1% in 1997 and 32.2% in 2010—claimed they were “ineligible” for an employer-sponsored plan, typically because they had not completed their probationary period or they were temporary or part-time workers.

Other highlights of the report include:

• In 2010, 71.1% of employed individuals ages 15 and older worked for an employer that offered health insurance benefits to any of its employees.
• Less than half (42.9%) of individuals who did not complete high school worked for an employer that offered health insurance to any of its employees, compared with more than three-quarters (78.9%) of individuals with a college degree.
• 75.7% of workers ages 45 to 64 worked for an employer that offered health insurance benefits, compared with 60.0% of workers 19 to 25.
• Among married couples with only one member employed in a firm that offered health insurance benefits, 68.7% of married couples provided coverage for the spouse.
• While 37.6% of firms with fewer than 25 employees offered more than one health insurance plan, 65.6% of firms with 1,000 or more employees offered more than one plan.

The report uses data from the Survey of Income and Program Participation.

–Sara Kelly