Fewer workers being covered by employers' health insurance plans

While federal efforts to increase enrollment in health insurance plans offered by employers are to be implemented in the coming year, it appears that these efforts are mainly just making up ground that was lost in the previous decade or so. New research shows that through the end of 2011, the percentage of people covered by such plans has declined significantly.

Just 59.5 percent of all Americans were covered by health insurance issued through their employers at the end of 2011, down more than 10 percentage points from the nearly seven in 10 who received such coverage in 2000, a new study from the Robert Wood Johnson Foundation showed. Nationwide, about 47 states saw significant declines in this area, as did the District of Columbia. 22 states experienced drops of more than 10 points during this time. Altogether, that means about 11.5 million fewer people across the country are now receiving health insurance through their employers, with only 159 million covered at the end of 2011.

Robert Wood Johnson Foundation president and CEO Risa Lavizzo-Mourey says that much of this change is due to the fact that health insurance costs have skyrocketed in that time, and as a consequence, fewer companies are now offering such plans, the report said. Moreover, even those employers that do offer it might have lower rates of employee enrollment because some workers may not feel they can afford such coverage overall. Annual coverage costs for employees more than doubled in the 11-year span, rising to $5,081 on average from $2,490. Coverage for families jumped 125 percent to $14,447 from $6,415. In addition, the premiums paid by workers themselves more than doubled as well.

Unfortunately, persons with lower incomes were the most affected by the rate increases and the resultant reductions in coverage rates, the study found. While enrollment dropped 2.8 percentage points among families of four making at or above $89,400 per year – four times the federal poverty level – it slipped 10.1 points among those making just $44,700, or 200 percent of that level.

However, the new federal laws that impact insurance offerings for businesses change these rates significantly beginning next year. Those in charge of making such decisions for their companies will want to consider all their options for keeping these costs as low as possible, for the benefit of both employer and employee. One of these options is the Small Business Health Options Program (SHOP), which can cut costs considerably for many small companies and their workers.