Health insurance is essentially insurance provided to members of a group at a discounted rate by insurers. The insurers are able to pro...
For many employers, group health insurance is perhaps the most important fringe
benefit they offer because its advantageous tax-wise to both employers and
employees. Employers benefit because they get a tax deduction for offering
coverage. Employees benefit because compensation their employers provide them
with to meet premiums is untaxed. Employer-based group health insurance has a
broad reach. .
In recent years there have been some trends in the group health insurance field
that have contributed to the number of uninsured and, unchecked, may result in
even greater numbers of uninsured.
According to studies, there have been several countervailing trends with regard
to the availability and actual usage of employer-provided group health
insurance. The number of companies offering coverage have increased, but the
rate of people eligible for coverage and the rate of people who take their
employers up on the offer has decreased.
However, the rate of employees eligible for coverage dipped by nearly five
percent, and the number of people enrolled in employer-sponsored group health
insurance also dropped by almost seven percent. For our purposes, the offer
rate is the number of people who work where insurance is offered, the
eligibility rate is the number of employees eligible for insurance and the
enrollment rate is the number of people enrolled in an employer provided group
health insurance plan.
While it may seem odd that the offer rate has risen while the eligibility rate
has fallen, further study shows that while the number of employers offering
insurance has grown, the number of employees eligible to get it has dipped
because a growing number of firms are decreasing their number of full time
employees and increasing the number of part-timers. At many businesses, part
time employees are ineligible for employer-provided health insurance.
The substantial dip in the number of employees opting to buy into
employer-provided health plans can be explained by the rising cost of insurance
premiums. According to recent studies, while wages have stagnated for about a
decade the cost of health insurance coverage has risen greatly in the same
period of time. While many employers have increased their contributions to help
offset the rise, even these contribution increases have not absorbed all the
financial impact of rising premium costs.
Another factor in decreasing employee participation in employer-provided group
health insurance coverage is growing availability of Medicare and Medicaid. In
recent years more of the working poor have qualified for coverage in federal
health insurance programs, perhaps contributing to declining participation in
employer-provided health insurance. While more people are being covered under
these plans, they have not substantially contributed to a decrease in the
number of uninsured, which remains high.
According to recent studies, the people most likely to be without coverage from
a employer-based group health insurance plan include Hispanics, older working
women, young workers and workers in small businesses.
The rising cost of health coverage has impacted the ability of small businesses
to offer affordable health coverage to employees. In general, small businesses
may be able to offer health coverage to employees, but they are unable to
contribute as much to their employees' coverage as larger companies. This is a
disturbing trend for public health advocates, as most new jobs being generated
come from small businesses.
Overall, the rising cost of health insurance poses problems for both employers
and employees. Employers must raise prices, reduce staff or freeze contributions
to benefits to keep pace with costs and employees are left to decide whether
coverage is worth the substantial financial sacrifice they must make to obtain
coverage. Without comprehensive reform of health care, this problem is likely
to continue to worsen. Attempts at health care reform from both the right (tort
reform) and left (single payer) have run into brick walls erected from partisan
and special interest groups.
