Short Takes On News & Events

Employers See Negligible Increase In Workers Participating In Job-Based Coverage

By Julie Appleby

March 12th, 2014, 2:30 PM

Employers saw only a tiny increase in enrollment in their health insurance plans this year, even as key provisions of the health law — including a requirement that nearly all Americans carry coverage or face a fine — went into effect, a survey by benefit firm Mercer finds.

Additionally, the percentage of workers eligible for job-based coverage rose only minimally, suggesting that employers didn’t expand their programs. This may reflect a one-year delay in rules requiring employers of 50 or more to offer insurance to full time workers or face penalties. In February, the Obama administration gave firms with 50 to 99 workers until 2016 to comply.

“What was most surprising was that we did not see much growth in [employer plan] enrollment,” said Beth Umland, director of research for health and benefits at Mercer. “It may just be pushed off until 2015, or employers are finding ways to have a soft landing around enrollment growth.”

She also speculated that the penalty for Americans who don’t have coverage — $95 or 1 percent of income this year, whichever is greater — may not be high enough to prompt some workers to enroll in coverage they are offered. In addition, some may not choose to enroll in an employer plan because they have coverage through a spouse or another program.

Across the 700 firms chosen at random for the survey, average enrollment grew from 69.1 percent of workers last year to 69.3 percent. Meanwhile, the average percent of employees eligible for coverage grew from 84.9 in 2013 to 85.2 this year.  The survey also found:

  • 21 percent of firms in the hospitality sector made changes this year to meet the health law’s provision that insurance coverage be offered to those who work 30 hours a week or more, while 15 percent of government and retail employers did so.
  • Overall, 10 percent of firms surveyed said they reduced the number of hours their employees worked or plan to do so in 2015, to avoid the 30-hour rule, while 14 percent said they made some other kind of change.
  • 12 percent of firms – up from about 9 percent – said they instituted a surcharge for covering spouses who were eligible for insurance through their own jobs, with very large employers more likely to do so than those with fewer than 500 workers.

Spousal surcharges are a way for employers to avoid costly coverage that other employers could shoulder. A few firms won’t cover spouses that have other coverage options at all, a move made by UPS last year.  But the Mercer survey found that only 8 percent of firms bar spouses altogether.

Paul Fronstin, a senior research associate at the nonpartisan Employee Benefit Research Institute in Washington, D.C., said that’s not surprising because such limits have a much smaller impact on employer costs than changing premiums, copays or deductibles.

The Mercer survey noted employers attempting to control costs in those ways as well, saying 32 percent of employers surveyed raised deductibles or other cost sharing provisions for workers, while 33 percent are trying to steer more employees into high-deductible plans.

The survey was conducted for two weeks in January and was a random sample of employers across all size ranges, including some Mercer clients.

4 Responses to “Employers See Negligible Increase In Workers Participating In Job-Based Coverage”

  1. Ted says:

    If you think certain employers value their employees enough to offer health benefits, think again! There’s only one way to get corrupt employers to participate as members of society and to encourage them to have a little compassion regarding the well being of employees. The government should tax them at a very high rate. A rate high enough to cover a single-payer government run universal healthcare system like they have in the UK and in Canada. Some corrupt employers have no interest in anything but profits. Some corrupt employers could not care less about their employees. Those employers must be heavily taxed! Any employer trying to escape the Affordable Care Act should be heavily taxed! Employers that offer their employees decent healthcare should not be taxed.

  2. Jennifer Hu says:

    I have been doing my own personal survey of employees and workplace health plans.
    1-employers notified employees that they would have to find their own health insurance but the owners,families,and upper management retained employer based insurance to qualify for the tax credits at the end of the year. BAD RESULT, As previous writer wrote, this behavior should have a negative consequence.
    2-employees as a result of this employer activity blame the affordable healthcare act. They and their families now are paying a fortune for their health coverage and no wage increase to cover the higher cost. BAD RESULT the local legislators upon inquiry concur that the ACA is responsible, When asked what they suggest to remedy the stated repeal obamacare. I have since learned that if ACA is repealed the legeslators can go back to their old plans themselves. HUH!
    3-They earn just enough not to qualify for assistance with these new premiums that are very high, $600.00 for example. BAD RESULT these bad employers truly have no business running a business with employees. sounds like the Tax Code needs more work to stop rewarding this bad behavior. On the flip side then these employees would have no work at all.
    While this is only my survey, I polled employees informally at grocery stores, auto dealerships, gyms, and small businesses in my county. I am saddened to see just how selfish these business owners are where I live and am compelled to say something about it.

  3. Jennifer Hu says:

    Addendum; perhaps employees and employers could work out a deal that would
    1- increase pay
    2-do a dual pay for health coverage costs % to be worked out
    Is that not doable?

  4. Jennifer Hu says:

    Addendum; perhaps employees and employers could work out a deal that would
    1- increase pay
    2-do a dual pay for health coverage costs % to be worked out
    Is that not doable under the ACA?