Trends in Employer Health Care: Eligibility, Participation, and Rates
June 27, 2013
The ADP Annual Health Benefits Report traces trends in eligibility, participation, and premium rates for employer covered health care from 2010 to 2013. The report finds that, as the full implementation of the Affordable Care Act (ACA) approaches, companies have begun restructuring their benefits packages and corporate coverage options. Changes in employer health coverage in recent years may reflect provisions of the ACA.
The report found that employer sponsored health care eligibility and participation rates among full time employees remained relatively steady from 2010 to 2013, with variations primarily based on demographic group. Although gender and marriage accounted for an insignificant percentage of eligibility and participation variations, age reflected more significant changes, possibly influenced by ACA regulation.
Age played an important role for employer health insurance coverage. Both eligibility and participation rates were higher for older workers. Fulltime employees age 50-59 participated in employer provided health plans at the highest rate, 72%. This trend is consistent with the overall aging of the workforce as the baby boomer generation continues to work into their sixties and seventies.
On the other end of the spectrum, the youngest employees participated least in employer health coverage. Only 50.1% of workers under the age of thirty participated in employer health plans. In addition, the under-thirty age group eligibility rate decreased the most, dropping by 4.6%. Because the youngest workers tend to make the least income and are generally healthier, they are less inclined to purchase health insurance. Thanks to the provision of the ACA that allows people to remain on their parents’ health insurance until 26, younger workers may remain on their parent’s coverage longer, and aging workers may continue work to provide these additional benefits to their older children.
An important change in employer health coverage is the cost of plan premiums. Premiums have increased in price every year. Between 2010 and 2013 premium rates rose 13.9% with a 7.6% jump between 2010 and 2011. But, after 2011, prices began to moderate and the rate of increase slowed, caused in part by employers reducing actual coverage value, using high deductible plans, or implementing consumer directed health plans.
Again, age remained a key factor in the rate of premium growth. The steepest rate of increase fell upon the under-thirty age group, increasing by 16.3% since 2010. The 40-49 age group maintained the highest monthly premiums, averaging $949 a month. These high premiums may also be attributed to the fact that this age group is more often covering their children until they reach 26.
Employer premiums varied widely state-to-state. The report found that New Jersey had the highest premiums at $968, but a low rate of increase. In contrast, Colorado maintained the lowest premiums at just $733. And while North Carolina did not have the highest rates, it had the largest percentage increase at 18.8%.
To view the full report: ADP Annual Health Benefits Report