Employment-Based Health Benefits: Trends in Access and Coverage

August 2005
EBRI Issue Brief #284
Paperback, 28 pp.
PDF, 595 kb
Employee Benefit Research Institute, 2005

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Executive Summary

• This Issue Brief examines the state of employment-based health benefits among workers with respect to offer rates, coverage rates, and take-up rates. It also examines how the state of employment-based health benefits has changed since the mid-1990s, reasons why workers do not have employment-based health benefits from their own employer, and how these reasons have changed since the 1990s.

• Fewer workers taking coverage: Between 1997 and 2002, the percentage of workers offered health benefits increased from 70 percent to 71.4 percent, and the percentage of workers covered by that health plan increased from 60 percent to 60.7 percent. Despite the fact that offer rates and coverage rates had increased, the percentage of workers taking coverage when offered declined from 85.7 per-cent to 84.9 percent.

• Reasons not covered: In 2002, 41.9 percent of wage and salary workers ages 18–64 reported that they worked for an employer that did not offer health benefits. Another 17 percent worked for an employer that provided health benefits but were not eligible for those benefits. More than 27 percent of workers reported that they were offered health benefits but they chose not to participate.

• Ineligibility: Just over 30 percent of workers not eligible for their employer’s health plan reported that they had not completed the required waiting period in 2002, while nearly 9 percent reported that they were employed either on a contract or temporary basis. Workers were much more likely to report that they were not eligible for health benefits because they worked part time.

Among workers who were not eligible for their employer’s health plan, 40.2 percent were uninsured in 2002, 45.7 percent had employment-based health benefits as a dependent, 5.9 percent purchased health insurance directly from an insurer, and 8.2 percent were covered by a public program.

• Nonparticipation: Among the reasons given by those who chose not to participate in their employer’s health plan, 75.4 percent stated that they were covered by someone else’s health insurance in 2002. Just over 22 percent reported that the plan was too costly, and another 3.1 percent reported that either they did not need insurance or they did not want insurance.

• Dependent coverage: Workers whose employer does not offer health benefits are more likely to be uninsured than they are to have employment-based health benefits as a dependent. In 2002, 46.3 per-cent of workers whose employer did not offer health benefits were uninsured. In contract, 37 percent of those workers had employment-based health benefits as a dependent, 7 percent purchased health insurance directly from an insurer, and 9.8 percent were covered by a public program.

Workers with access to health benefits through their own job were much less likely to be uninsured and much more likely to be covered by employment-based health benefits as a dependent. Specifically, 20 percent were uninsured in 2002, 70.5 percent had employment-based health benefits as a dependent, 2.9 percent purchased health insurance directly from an insurer, and 6.7 percent were covered by a public program.