After years of erosion, employer health insurance offer rate ticks up in 2016

Despite predictions the Patient Protection and Affordable Care Act (ACA) would cause private sector employers to stop offering health coverage to their workers, the national offer rate is ticking up, according to recent research from the Employee Benefit Research Institute (EBRI). EBRI noted that the offer rate has likely increased because of a health economy and low unemployment rates.
EBRI examined the percentage of employers offering health insurance from 2008-2016 to better understand how health insurance offer rates may have been affected by the ACA, the Great Recession of 2007-2009, and the subsequent economic recovery.
“Many employers were expected to drop workplace health insurance with the introduction of the ACA. But since 2008, the percentage of coverage-offering employers with 1,000 or more employees has been consistently near or above 99 percent,” said Paul Fronstin, director of EBRI’s Health Research and Education Program.
The exception is small employers, where the offer rate has gone down slightly. According to Fronstin, “Smaller firms have shown a steady, though not precipitous, decline in offer rates.” For the smallest employers studied (those with fewer than 10 employees), the offer rate declined from 22.7 percent in 2015 to 21.7 percent in 2016.
EBRI found that over the last year, there is evidence of what may be a rebound in employment-based coverage offer rates among firms with 10 to 99 employees. More specifically, from 2015 to 2016:

  • For employers with 10 to 24 employees, those offering health benefits increased from 48.9 percent to 49.4 percent.
  • For employers with 25 to 99 employees, those offering health benefits increased from 73.5 percent to 74.6 percent.

For employers with 100 to 999 employees, those offering health benefits increased from 95.1 percent to 96.3 percent. For these employers, this trend actually began a year earlier, when the offer rate increased from 92.5 percent in 2014 to 95.1 percent in 2015.

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