This Issue Brief presents the findings of a study of what employers think and do about providing health benefits for their own workers and what they think about covering the population without health benefits. Most Americans under age 65 received health coverage through employers. Yet, about 16 percent of this population was uninsured in 2000. Government programs generally do not target workers whose employers do not offer them health benefits or who cannot afford their share of premiums. In the current policy framework, the decisions that America's 6 million employers make about offering, pricing, and designing health benefits have a major impact on the number of people with and without health coverage.
With funding from the Robert Wood Johnson Foundation, a literature search, a Web-based survey, and focus groups were conducted to probe present and past attitudes and practices toward health benefits and uninsured workers and their families. The research reveals several challenges and opportunities concerning the role that employers play in providing health coverage.
The survey and focus groups showed that employers typically focus on running their own health benefit programs and not on the impact of their practices on the larger community or business sector as a whole. Employers offer health benefits as part of their competition for the best workers. Improving the health status of their work force is a secondary motive to employers, but also an important one.
Offering coverage as part of firms' competition for labor cuts both ways in affecting aggregate health coverage levels. On one hand, most large firms must offer coverage to full-time employees to be regarded as viable employers. However, because in today's economy a husband and wife often work for different organizations, employers are sensitive to the risk that offering "too-generous" family coverage may draw a disproportionate share of dependents. Therefore, some offer financial and other incentives for employees and their dependents not to enroll in their plans.
Some employers realize that passing along greater costs to employees may cause low-wage workers to forgo coverage. A few are calibrating employee premium contributions to wage levels or exploring the possibility of doing so. Some provide employees with information about government programs that may be available to them or their families, but usually only upon request.
Under current policy, if a goal is to increase coverage levels, efforts need to be made to increase employer awareness of the value of health coverage to the success of their businesses and to facilitate employer involvement in community wide efforts to increase coverage levels.
