Report finds relatively steady rates of insurance access since the passage of the ACA
Of employers with fewer than 10 employees, the percentage offering coverage dropped from 28% in 2013 to 22% in 2016.
These findings are part of a new study from the Employee Benefit Research Institute (EBRI), released earlier this month. EBRI looked at the overall availability of employer-based plans on the private market and found that trends had remained stable over the past two decades—large employers nearly always offer health benefits, with that availability decreasing as the size of the employer goes down.
For example, in 2022, 99% of companies with 1,000 or more employees offered health insurance; for companies with 100 to 999 employees, the percentage was 97%. In addition, for companies with 25-99 employees, 80% offered health benefits. Smaller companies were less likely to offer coverage: of those with 10-14 employees, 54% offered health benefits in 2022; and of the smallest companies, with fewer than 10 employees, 25% offered health benefits.
The effect of the ACA
The numbers on employer-offered insurance have changed only slightly since 2013. One of the predictions made about the ACA was that the establishment of new insurance exchanges which offered individual coverage would prompt employers to drop private coverage for their employers and allow them to go on the individual market.
“Shortly after the ACA was enacted in 2010, numerous predictions that employers would drop coverage were made: The Congressional Budget Office (CBO) issued several predictions that between 5 and 20 million fewer people would have employment-based health coverage in 2019 because of fewer employers offering health coverage after the ACA,” the report said. It added that other analysts predicted that as much as 90% of workers with employment-based health coverage would shift to individual coverage in public exchanges by 2014.
However, 23 years after the passage of the health reform law, employer-based private insurance remains the norm for most Americans. The report notes that the trends show a slight decrease in firms offering insurance overall: from 57% in 2008 to 48% in 2022. However, the number of American workers eligible for such plans has increased, from 78% of the workforce in 2008 to 89% of the workforce in 2022. The report said the numbers suggest that offering health benefits is an effective way to attract workers: “While increasing offer rates is one reason why more workers are eligible for coverage, we also found that workers have been migrating to jobs that are more likely to offer health coverage.”
Again, the employers with the most workers overwhelmingly offer health benefits. “Large employers have stayed the course by continuing to offer health coverage to their workers,” the report said. “Nearly all large employers offered health coverage before enactment of the ACA and continued to do so through 2022.”
Small and medium-sized companies have seen more fluctuation. For example, of employers with fewer than 10 employees, the percentage offering coverage dropped from 28% in 2013 to 22% in 2016, then rebounded slightly and was up to 25% in 2022.
QSEHRA and ICHRAs—will they be rich (in benefits)?
Recent innovation in health plans include Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) plans that offer HRAs, as well as individual coverage health reimbursement arrangements (ICHRAs). This new type of HRA remains a bit of a question mark—the Trump Administration predicted 800,000 employers would take advantage of the new plans. So far, the EBRI report noted, 2,500 employers offered an ICHRA in 2022, while close to 6,000 offered a QSEHRA. While growth in these plans has continued, the report added that the current results are “far from the 800,000 prediction.”
Related: Health care costs are main driver behind anticipated hike in ACA premiums in 2024
The new arrangements come with their own possible complications: “There is no question that the ICHRA provision gives employers the means to drop traditional health coverage and go to a [defined-contribution style] plan,” the report said. “One of the concerns is that employers will try to structure their plans in such a way to send high-risk employees to the individual market. The regulations include several provisions to prohibit such a discriminatory practice. However, what if only employers facing the highest premiums in the group market adopted HRAs? If such a phenomenon occurred, the non-group market would not become more stable and may see average premiums increase. In contrast, the group market would see a reduction in average premiums as higher-risk groups left.”
Such issues remain to be ironed out. The EBRI report added that many larger employers are not yet familiar with ICHRAs, and some remain skeptical about them. The numbers from this latest report may suggest that U.S. employers and workers are content to stick with tried-and-true health benefit arrangements, since they have remained relatively stable for the past decade.