EBRI Study Explores Employers’ Views on Health Insurance

October 3, 2002

America’s 6 million employers largely determine the number of insured – and uninsured – Americans, and new research by the Employee Benefit Research Institute (EBRI) examines how and why employers make their health plan decisions. Most Americans under age 65 receive health coverage through employers. About 16 percent of this population was uninsured in 2000.

The October EBRI Issue Brief reports a study designed to identify employer attitudes toward health benefits and whether employers are willing consider the impact of their practices on the larger community. The Robert Wood Johnson Foundation funded the research. EBRI and its affiliate, the Consumer Health Education Council (CHEC), will use this project in future research.

Key findings include:

* Employers typically focus on running their own health benefit programs and not on the broader impact of their practices. Employers offer health benefits to compete for the best workers. Improving the health status of workers is a secondary motive.
* Offering coverage cuts both ways in affecting aggregate health coverage levels. Most large firms must offer coverage to full-time employees to be regarded as viable employers. But today a husband and wife often work for different organizations. Employers realize that offering “too generous” family coverage may draw a disproportionate share of dependents. Therefore, some offer incentives not to enroll in their plans.
* Some employers realize that higher costs to employees may cause low-wage workers to forgo coverage. They are calibrating employee premium contributions to wage levels or exploring the possibility of doing so. Some provide employees with information about government programs, but usually only on request.
* Because employers do not perceive covering the uninsured as a priority, the business organizations representing them do not focus on this issue.
* 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 expand coverage levels.

“A compelling business case that causes employers to voluntarily to cover more of their own workers, or join with others in actively supporting federal, state, and local coverage expansion efforts, is a key element of a strategy to expand coverage,” EBRI President and CEO Dallas Salisbury said.

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