EBRI Issue Brief

Employment-Based Health Benefits: Access and Coverage, 1988-2005

Mar 1, 2007 24  pages


Employment-based coverage most prevalent among working-age Americans: Employment-based health benefits are the most common form of health insurance for nonpoor, nonelderly (those below age 65) individuals and workers in the United States. In 2005, 63.1 percent of workers were covered by an employment-based health plan from their own employer, 14.9 percent had coverage through an employer as a dependent, and 17 percent were uninsured. Among workers eligible for health benefits, 84.2 percent were covered by their employer, 9.8 percent had coverage through an employer as a dependent, and 4.8 percent were uninsured.

Offer and participation rates have remained steady: Even with the ebb and flow of health care coverage due to economic trends, the percentage of workers offered coverage and the percentage of workers taking coverage when offered have remained steady since as far back as the late 1980s.

   --> Sponsor rates: The share of individuals working for an employer that sponsors a health plan (the sponsor rate) has hovered between 81–84 percent since the late 1980s, and in 2005 was 80.9 per-cent.

   --> Eligibility rates: In 2005, 74 percent of workers were eligible for health benefits from their own employer (the eligibility rate). Since the late 1980s, the share of workers eligible for health benefits from their own job has hovered between 74–78 percent.

   --> Participation rates: The share of workers with health benefits from their own employer (the participation rate) has ranged from about 62–68 percent since the late 1980s. In 2005, 62 percent of workers were covered.

   --> Take-up rates: The share of workers who take health benefits when they are offered (the take-up rate) was 83.5 percent in 2005, down from 87.9 percent in 1988. However, workers who decline health coverage are more likely to have coverage elsewhere (such as from another employed family member); few workers eligible for health coverage are uninsured (about 4 percent from 1995–2005).

Reasons workers do not have coverage: There are a number of reasons why workers may not be covered by their own employer’s health plan. In 2005, 50.1 percent of workers worked for an employer that did not offer health benefits to any workers. Nearly 18 percent worked for an employer that provided benefits, but were not eligible for them; and nearly one-third were offered benefits but chose not to participate.

   --> Part-time workers: Among workers not eligible for benefits, 56.8 percent were employed part time, 18.3 percent had not completed the required waiting period, and 9.4 percent were employed on a contract or temporary basis.

   --> Other coverage: Slightly more than 62 percent of workers who declined coverage had other coverage, and 23 percent declined it because it was too costly.