Trends in the Workplace — Fewer People have Employment-Based Health Coverage

by Kevin K. Johnson, Certified Senior Advisor (CSA)®

Recently I speaking with an executive of a prominent large employer regarding trends in workplace. Specifically we were discussing the decrease in employment-based health coverage that has taken place over the past decade. As you likely know, traditionally, employers have been the provider of the majority of health care in the United States. However, due to the tremendous cost of managing these programs and the ever-increasing cost of health insurance from providers, more-and-more companies have been quietly moving away from providing services to their employees.

The following report in the April 25, 2012 edition of Employee Benefit News (EBRI)documents the trends.

“Since 2002, the percentage of American workers with health coverage has fallen, mostly because fewer workers have access to coverage through their jobs,” says Paul Fronstin, author of the report and director of EBRI’s health and education program. “Fewer employers are offering the benefit, fewer workers are eligible for it and fewer workers are taking advantage of the benefit when it is offered, largely due to cost.”

The report notes that the percentage of the population with employment-based health benefits is lower, most recently due to the recession, but also as part of a longer-term trend that has seen fewer workers with access to health coverage.

Among the key reasons:

• Fewer employers are offering health coverage to their workers. Between 1997 and 2010, the percentage of workers offered health benefits from their employers moved from 70.1% to 67.5%.
• A growing percentage of workers are part-time and typically do not qualify for their employers’ health benefits. Two-thirds of workers not eligible for their employers’ health plans reported that they worked part-time in 2010, up from one-half in 1997.
• When health coverage is offered, workers increasingly are turning it down because they say it’s too expensive.  Between 1997 and 2010, the percentage of workers who declined coverage because of cost increased from 23.2% to 29.1%. By contrast, fewer workers are declining coverage because they get it from somewhere else.

Overall in 2010, 46.7% of wage and salary workers ages 18 – 64 reported that they worked for employers that did not offer health benefits. Another 14.7% worked for employers that provided health benefits but were not eligible for those benefits. One-quarter of workers reported that they were offered health benefits but chose not to participate.

The rate of uninsured workers is going up, EBRI found. In 2010, one-half of workers whose employers did not offer health benefits were uninsured compared with 44.1% in 1997.

When I was a manager in corporate America, I remember the shared employer/employee disdain over health care benefits. Employers were shopping and  constantly making an annual change in health care providers. This was followed by the annual meetings with employees to explain the new health care plans and the reduced benefit offerings. The overall cost to employers, factored in as a cost-of-doing-business was exorbitant.

I told the executive I was speaking with that this was a major factor in our decision to introduce Caring Concierge in 2006 in a new model, separate from health care providers. Our ability to help employers significantly reduce their portion of the over $30 billion per year in lost employee productivity resulting from adult caregiving is unimpeded; we don’t charge our clients to offer our services as a benefit to their employees.