Employer Sponsored Plans ACA

Health Insurance

July 19, 2016

Work-sponsored health insurance rates have held steady since 2013 according to a new survey released in July by the Urban Institute. The Health Reform Monitoring Survey tracked offers and acceptance rates for job-based health insurance from March 2013 through June 2016. During that timeframe, the number of people who were offered health care plans as part of a work incentive stayed about the same while the number of people who accepted job-based coverage also remained stable.

For some demographics, the number of employer-sponsored health plans rose. In fact, the HRMS report shows a marked increase in the number of certain people with job-based coverage this year, especially for the Hispanic population and those with the lowest levels of education.

In 2013, nearly 63 percent of Hispanics surveyed were offered health insurance at work. That percentage increased 10 points to just over 73 percent in 2016. Coverage increased from 46 percent in 2013 to over 53 percent in 2016. For those with less than a high school education, the percentage of covered employees increased from 34.6 percent in 2013 to 40.7 percent in 2016. The number of people with employer-sponsored coverage increased slightly or stayed about the same across the board.

Despite fears by financial analysts and opponents of the Affordable Care Act that Obamacare health plans would lead to a decrease in the availability of work-based coverage, numbers have remained steady since the law took effect in 2013.

The Urban Institute suggests several reasons for the survey’s outcome. For starters, there are tax advantages to having work-sponsored coverage, a fact that employers can use to keep workers satisfied in their current employment. The ACA has had no impact on the average worker’s ability to take advantage of tax breaks for work-based health plans. Tax credits are also available to small employers who offer health insurance plans even if they wouldn’t be obligated to do so by law.

The ACA requires that businesses with more than 50 full-time workers provide qualified major medical coverage to their employees if at least one of their workers finds subsidized coverage on the marketplace. This rule went into effect in January 2015 for larger companies and 2016 for smaller firms.

Similarly, individuals must purchase qualifying Obamacare plans during the open enrollment period each year or face substantial penalties when they file taxes. The individual mandate has kept many individuals accountable for purchasing health insurance or enrolling in work-based coverage. It also enables employers to use work-sponsored coverage as a leveraging tool for hiring.

Among Americans with health insurance, work-based coverage is the most common form of coverage even after the opening of the ACA marketplaces in 2013. Approximately 155 million workers under the age of 65 have job-sponsored plans. By comparison, 76 million Americans are covered under Medicaid and just over 11 million have Obamacare health plans from federal or state marketplaces. Until the ACA took effect, the number of people with employer-sponsored health care had actually started to decline over the past decade. Now, that number is holding steady or increasing in some cases. According to the HRMS report, 72.1 percent of all workers aged 18 to 64 have job-based coverage as of March 2016, which represents a slight increase of just over 1 percent since June 2013. Neither business size nor income levels significantly affected these figures.