Employer Health Coverage Post Recession

A new report on employer sponsored health insurance issued by the Robert Wood Johnson Foundation shows some interesting trends in coverage post-recession. “State-Level Trends in Employer-Sponsored Health Insurance”

The overall trend in employer health insurance coverage has been on a downward slide for several decades and that trend is continuing. In 2000, almost 70 percent of non-elderly workers got their health coverage from employer plans but by 2011 the percent fell to 60 percent. Interestingly, it wasn’t just because the number of employers offering coverage declined by 6 percent, but also because 5 percent fewer workers who were offered coverage actually enrolled. It seems that the intersection of the recession and the cost of health insurance created a perfect storm. The report found that premiums for family coverage increased by 125 percent over the last decade, and even though the employee share remained fairly constant, the net impact on worker’s out-of pocket costs was dramatic, increasing from $1,526 to $3, 842. The decline occurred in 47 states but the impact varied dramatically by state. Michigan, which was hard hit by the problems in the auto industry and other economic woes, led the way with a decline in employer sponsored coverage of over 15 percent. The study found that while employer coverage declined for all income groups, the impact on the lower income groups was disproportionately greater.

These trends will be interesting to watch with the launch of the Exchanges in 2014. The report raises an interesting question about whether small employers will increasingly shift to self-insured plans rather than offer insured plans through the SHOP Exchanges. If that is the case, there could be possible adverse selection for employers who use the SHOP plans.

Resources

To learn how Gorman Health Group can help your organization get involved in the Exchanges or other government programs, visit our website.