- The number of employees who have gained healthcare coverage through employer-sponsored health plans has been rising in recent years as the economy recovered and more Americans gained a foothold in the workplace. With a stronger economy, the health insurance market is likely to serve more consumers.
The Agency for Healthcare Research and Quality (AHRQ) released a report this month showing that the number of private sector employees who gained employer-sponsored healthcare coverage in 2015 rose by approximately 1.5 million people. Almost 50 percent of employees had enrolled in a health plan through their employer much like in 2014, reports the American Hospital Association.
The AHRQ report outlined the trends of employer-sponsored healthcare coverage from the years 2008 to 2015. It was found that smaller employers had lower rates of workers enrolled in employer-sponsored health plans.
The report uses data found in the Medical Expenditure Panel Survey-Insurance Component (MEPS-IC) to discuss a number of different trends from deductibles to premiums in employer-sponsored healthcare coverage. The data comes from a survey that is administered across all 50 states.
Essentially, research like this is vital in better understanding how the Affordable Care Act has affected the health insurance market since its implementation along with whether trends regarding employer-sponsored plans have changed. The provisions under the Affordable Care Act could have a major impact on employer-sponsored insurance.
For instance, young adults who are employed may still stay on their parents’ health plans until age 26 while those with pre-existing conditions will no longer be discriminated against and have full access to health coverage after their diagnosis. The elimination of out-of-pocket costs for preventive services was also guaranteed starting in 2010.
As time went on, the health insurance exchanges, tax subsidies, and Medicaid expansion opened up the market to more consumers in 2014. This report delved into how these transitions for the health insurance market impacted employer-sponsored coverage.
The results from the report show that the number of consumers enrolled in employer-sponsored healthcare coverage rose from 55.8 million in 2014 to 57.3 million in 2015. In fact, at large firms, the number of employees covered under employer-sponsored insurance rose by 1.6 million people.
However, it is important to note that, at smaller companies with less than 50 employees, the enrollment rate in this type of coverage was reduced from 28.3 percent to 27.1 percent between 2014 and 2015.
The results also show that 47 percent of employees from medium-sized companies were enrolled in employer-sponsored insurance while 56.4 percent of workers at large companies had purchased these type of health plans.
When it comes to premium prices, private-sector employer health plans cost nearly $6,000 per year for single coverage plans and more than $17,000 for family plans. However, the majority of these costs are covered by the employers. The actual employees will contribute an average of $1,255 for single coverage and $4,710 for family coverage plans. The number of people enrolled in a plan with a deductible has also risen from 83.9 percent in 2014 to 85.4 percent in 2015.
In fact, past research shows that high-deductible health plans are currently dominating a majority of employers’ health plan offerings. Only six years ago, the number of workers who had an annual deductible was at 70 percent while today that number jumped past 80 percent, according to the Kaiser Family Foundation’s 2015 Employer Health Benefits Survey.
“Since 2010, the percentage of covered workers with a general annual deductible for single coverage has increased from 70 percent to 81 percent,” the Kaiser Family Foundation stated in its report.
“Whether or not a worker has a general annual deductible, most workers face additional types of cost sharing (such as a copayment, coinsurance, or a per diem charge) when admitted to a hospital or having outpatient surgery. The distribution of workers with cost sharing for hospital and outpatient surgery does not equal 100 percent as workers may face a combination of types of cost sharing. In addition, the average copayment and coinsurance rates for hospital admissions include workers who may have a combination of these types of cost sharing.”
The Affordable Care Act has also positioned the Cadillac Tax and the employer mandate, which has led employers to strategize and choose different health plan options, according to Jenny Kerr, Senior Analyst at Decision Resources Group. Some have chosen high-deductible health plans while others are focusing on narrow network plans.
“The Cadillac Tax was delayed for a couple of years right at the end of 2015. That’s pretty new, but throughout the year of 2015 employers have been really studying this and trying to figure out if it’s going to affect them,” Kerr told HealthPayerIntelligence.com. “Most employers were already starting to look at this and starting to change plans to either narrow networks, consumer-directed health plans or high-deductible health plans. That switch has been happening and will continue to happen even though it’s now delayed.”
Clearly, the health insurance market is changing and employer-sponsored health plans are also seeing trends varying from years past due to the impact of the Affordable Care Act. In the future, more workers are likely to have healthcare coverage because of the individual mandate and various reforms such as Medicaid expansion.