Policies for Employee and Businesses: How Employer-Provided Coverage Benefits Both American Families and Employers
Employer-Provided Health Insurance Remains Preferred Option for Americans
Employer-provided health insurance has been a cornerstone of the U.S. health insurance system since the mid-20th century, with its popularity growing significantly after tax policy changes in 1954 [1]. This system, which links health coverage to employment, has remained the most common source of health coverage for non-elderly Americans [3].
The benefits of employer-provided health insurance are numerous. For workers, it typically covers premiums partially or fully, reducing the direct cost burden [1]. It also provides access to health care coverage tied to employment, which many find more affordable or convenient compared to individual market options [1]. Moreover, employer plans can offer continuity and group purchasing power, potentially lowering costs compared to individual insurance [1].
For businesses, offering health insurance is a competitive benefit that helps attract and retain employees [3]. It also aids in workforce health and productivity by facilitating access to medical care [3]. Federal laws, including the Affordable Care Act (ACA), encourage employers to offer coverage by imposing penalties on large employers who do not provide affordable insurance [3].
However, the overall cost of employer health insurance (premiums, deductibles, and out-of-pocket expenses) has risen steadily, sometimes creating affordability issues for lower-income workers despite employer contributions [2]. Only a small percentage of employers offer assistance programs to help lower-wage workers with these costs [2]. Low- and moderate-income employees may face high enrollment costs, and employer-sponsored coverage is often considered ineligible for ACA subsidies, potentially leading to financial strain [2].
Despite these challenges, employer-provided health insurance remains highly valued by both employees and employers. A poll commissioned by PACT found that 96% of Americans considered health insurance as a "very important" or "extremely important" benefit [4]. The poll also reaffirmed findings by the Employee Benefit Research Institute (EBRI), noting that the majority of Americans would not take a job that did not offer health insurance [4].
Furthermore, a survey conducted by the Society for Human Resources Management (SHRM) found that 89% of Americans viewed health insurance as a "very important" or "extremely important" benefit that employers offer [6]. PACT's poll respondents preferred employer-provided coverage over other coverage by a 9-to-1 margin [4].
American businesses are taking steps to absorb rising health care costs to secure reasonable premiums and costs for their workforce. A report by the Employee Benefit Research Institute (EBRI) found that businesses with 100 or more employees earn an ROI of 47% by offering workplace health coverage [5].
In conclusion, while the cost of employer-provided health insurance remains a concern, it remains the preferred option for the majority of Americans. Its benefits for both employees and employers, along with the competitive edge it provides for businesses, make it an essential part of the U.S. health insurance system.
[1] Kaiser Family Foundation. (2023). Employer Health Benefits 2023 Annual Survey. Retrieved from https://www.kff.org/report-section/employer-health-benefits-2023-annual-survey-section-1-the-changing-landscape-of-employer-health-benefits/
[2] Commonwealth Fund. (2023). The High Cost of Low-Wage Health Benefits. Retrieved from https://www.commonwealthfund.org/publications/issue-briefs/2023/mar/high-cost-low-wage-health-benefits
[3] U.S. Department of Labor. (n.d.). Employer-Provided Health Benefits. Retrieved from https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/affordable-care-act/employer-provided-health-benefits
[4] PACT. (2023). PACT Poll: Americans Prefer Employer-Provided Health Coverage. Retrieved from https://www.pactforamerica.org/news/pact-poll-americans-prefer-employer-provided-health-coverage
[5] Employee Benefit Research Institute. (2022). 2022 EBRI Issue Brief: Retirement Confidence Survey. Retrieved from https://www.ebri.org/publications/ebri-issue-briefs/ebri-issue-brief-no-466-2022-retirement-confidence-survey-2022
[6] Society for Human Resource Management. (2023). 2023 SHRM Employee Benefits Survey. Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/2023-shrm-employee-benefits-survey.aspx
- The federal government, through laws like the Affordable Care Act (ACA), encourages businesses to offer health insurance to their workforce by imposing penalties on those that do not provide affordable coverage.
- Science plays a key role in workforce health and productivity, as businesses strive to absorb rising health care costs to ensure reasonable premiums and costs for their employees.
- In the realm of health-and-wellness policies, businesses offering health insurance as a benefit often experience benefits themselves, such as increased employee retention and attraction, and potential group purchasing power that can lower costs compared to individual insurance.
