EBRI Issue Brief

A Buffeted Employer Health Care System Continues to Hold Firm: What Could Change That?

Sep 23, 2021 12  pages


More Employers Offering Health Benefits and More Workers Eligible for Them in 2020

Many employers were expected to drop workplace health insurance with the introduction of the Patient Protection and Affordable Care Act of 2010 (ACA), and some have done so. But, as this paper finds, there is considerable variation in the trends around those offering health insurance as well as in eligibility for health insurance benefits depending on establishment size and other factors.

This paper examines the percentage of employers offering health insurance from 2008–2020, with a focus on 2013–2020, to better understand how health insurance offer rates may have been affected by the ACA in addition to the Great Recession of 2007–2009 and the subsequent economic recovery. The data come from the Medical Expenditure Panel Survey - Insurance Component (MEPS-IC). The data show:

  • Since 2013, the percentage of employers with 1,000 or more employees offering health benefits to workers has been consistently near or above 99 percent.
  • However, smaller establishments have shown a steady, though not precipitous, decline in offer rates. For the smallest employers studied, those with fewer than 10 employees, the offer rate declined from 28 percent in 2013 to 22.3 percent in 2020.
  • In 2017, the overall percentage of private-sector employers offering health benefits increased for the first time in nearly a decade. In 2008, 56.4 percent of private-sector employers offered health benefits. By 2016, it was down to 45.3 percent. It then increased to 51.1 percent in 2020.
  • The percentage of workers eligible for health coverage through their job also continued its upward trend. Between 2014 and 2020, the percentage of workers eligible for health coverage increased from 75.4 percent to 80.5 percent. This increase was likely due to changes in the composition of the work force. We found a shift to full-time employment, more workers employed in firms with union employees, fewer workers considered low wage, and a shift to larger firms.

This paper discusses the context for the recent trends and suggests factors that may influence future trends.