The Future of Employment-Based Health Benefits: Have Employers Reached a Tipping Point?

[KansDem]

December 2007
EBRI Issue Brief #312
Paperback, 20 pp.
PDF, 556 kb
Employee Benefit Research Institute, © 2007

Some highlights...

• Death of employment-based benefits? There have been numerous references in recent reports to the death of employment-based health benefits. This Issue Brief examines the notion that employers have reached a “tipping point” where they will stop offering health benefits.

• Employment-based health coverage has fallen, but not sharply: Between 1994 and 2000, the per-centage of workers with health benefits through an employer held steady at between 73 percent and 75 percent. Since 2000, the percentage of workers with health benefits has fallen to about 71 percent.

• Business supports employment-based coverage, but not the status quo: The message from most associations representing employers is that the existing employment-based system must be reformed. Most individual employers, including leaders in the field, appear to share this vision. Individual employers believe that there is a business case for offering health benefits to their workers and they continue to invest in improving their health programs.

• Mixed views by plan sponsors: Employers interviewed for this study had mixed opinions concerning whether the employment-based health benefits system is the most viable model for providing health insurance. Some think it is the best system available, though they also think that the current system is both “inefficient” and “not intelligent” and that “if we could start over with a clean slate, we would not have the current system.” Some think that an improved version of the current system would be the best system. Others go so far as to say that the current system is not the best system because it is inefficient and because transparencies are lacking.

• Waiting to take the plunge: The employers interviewed for this study tend to agree that if one major employer were to drop health benefits, others would follow. And they tend to agree that public policy changes, such as the erosion or elimination of ERISA (federal) pre-emption of state insurance regulation, could result in the complete elimination of employer support for a voluntary employment-based health benefits system.

Employee Benefit Research Institute

Looks like employer-supplied health care is on a precipice and the slightest change in wind will push it over...

[SharonAnn]

1. I hope so. Then they'll sign on to single-payer health care.

[KansDem]

2. You know, you may be right!

Let's hope there's an administration in place who will oversee this! :thumbsup:

[dropkickpa]

3. It's just as hard on employers as employees

If my work didn't have our insurance bent over a barrel, the level of coverage I receive would cost 5x what I pay now (and the COBRA should I lose my job reflects that!!).