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Small Business Employee Benefits and HR Blog

Employer-Sponsored Health Insurance Continues to Drop

Employer-sponsored health insurance “eroded substantially” from 1999 to 2011. These are the findings published yesterday in a report by Robert Wood Johnson Foundation. According to the release, the analysis provides a baseline to measure the impacts of the Affordable Care Act expansions of public and private coverage in 2014.

Employer-Sponsored Health Insurance Declining in All Areas

Insurance decliningKey findings over the study period (1999-2011) include:
  • The percentage of people with employer-sponsored insurance declined 10%; from 70% in 2009 to 60% in 2011.
  • While most states saw “significant declines” in employer-sponsored coverage, the range was wide from Hawaii (84% coverage) to Alaska (42% coverage).  See charts to the right from USA Today's coverage of this study.

  • Employer-sponsored coverage varied by income. It fell less (3 percentage points) for high-income groups (defined as 400% of FPL or above) than for those with lower incomes (200 FPL or below) where the fall was 10 percentage points.

  • Nationally, the percentage of private-sector companies offering employer-sponsored insurance fell from 59% to 52% (although the percentage of workers eligible for coverage at firms that offered insurance held steady). The take-up rate also fell from 82% to 76%. 

  • Individual premium costs doubled ($2,490 to $5,081 annually); family premiums rose 125% ($6,415 to $14,447 annually); employee contributions increased (17% to 20% of the total premium).

Trends Due to Health Care Reform?  

The study found that no, employer-sponsored health insurance was already steadily declining nationwide before the Affordable Care Act was signed in 2010.

Employer Health Insurance Declining

"This documents that in virtually every state across the country, there has been a steady decline in employers that provide coverage over the past 10 years," said Andrew Hyman, director of the Robert Wood Johnson Foundation's health care coverage team, in a USA today article. "It would be a real stretch to say this was caused by anticipation of the Affordable Care Act," President Obama's 2010 health care law.

Click here to read the full report.

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