New research from the Employee Benefit Research Institute has found that although there was some erosion in health insurance offered by employers after the implementation of the Affordable Care Act, the percentage of private-sector employers offering health benefits increased in 2017 for the first time since 2008.
When the Affordable Care Act (ACA) was enacted in 2010, there was a deal of uncertainty regarding how the new health law would affect employer-sponsored health coverage. The Congressional Budget Office had predicted that anywhere from 5 million to 20 million people could lose health coverage through their employer.
New research from the Employee Benefit Research Institute (EBRI) has found that although there was some erosion in health insurance offered by employers after the ACA, the percentage of private-sector employers offering health benefits increased in 2017 for the first time since 2008.
According to Paul Fronstin, EBRI’s director of health research, there were increases across all sizes of plans.
“While the overall offer rate for health insurance trended down until 2017, the percentage of workers eligible for health coverage has been increasing since 2015,” Fronstin said in a statement. “Furthermore, the 76.8% of workers eligible for health coverage in 2017 was much higher than the percentage of employers offering such coverage. The juxtaposition between the 2 trends suggests that workers have been migrating to jobs that offer health coverage.”
The EBRI research brief used data from the Medical Expenditure Panel Survey — Insurance Component, which is a survey of private- and public-sector employers. In 2017, the survey interviewed more than 40,000 private-sector establishments.
The survey found that in 2017, the overall percentage of private-sector employers offering health benefits increased for the first time since 2008, although it was still below the 2008 level. In 2008, more than half (56.4%) of these employers offered health benefits, but that number had dropped to 45.3% in 2016, before finally increasing slightly to 46.9% in 2017.
Nearly all large employers offered health coverage before the ACA, and that remained little changed after the ACA, with coverage offered by consistently near or above 99%. Where the reduction in health coverage being offered occurred was among small and midsized companies. However, the data appear to show a rebound in employer-sponsored coverage in every size of company starting around 2015. While offer rates of health coverage are down 34% since 2008 among small employers with fewer than 10 employees, the rate was up 3.5% since 2015.
In the research brief, Fronstin speculated that the decline in availability of health coverage may be attributed to rising healthcare costs (and the fear costs will rise more), availability of nongroup insurance in the public exchange, the recession, and postrecession uncertainty.
However, in 2017, it seems to be more advantageous for small employers to offer health coverage, as premium increases have been relatively low and less volatile and the unemployment rate has continued to trend down.
While health coverage being offered among large and midsized employers has been relatively steady, that may change in the future, with these employers reducing their involvement. Fronstin noted that policy changes may drive some employers away from offering health benefits, such as if the delayed Cadillac tax takes effect.
“As always, it will be important to track the availability of employment-based health coverage trends into the future, to put them in the context of larger or separate changes, and to examine closely the possible causal relationships among the data and trends,” Fronstin concluded.