The number of businesses offering health benefits has remained relatively stable since the introduction of the Affordable Care Act (ACA) in 2010, and the percentage of workers eligible for employer-based coverage has actually increased slightly since 2014.
These findings are part of a new study by the Employee Benefits Research Institute (EBRI), released earlier this month. EBRI looked at the overall availability of employer-based plans in the private market and found that trends have remained steady over the past two decades, with large employers almost always offering health benefits, with that availability decreasing as employer size decreases.
For example, in 2022, 99% of companies with 1,000 or more employees offered health insurance; for companies with 100 to 999 employees, the percentage was 97%. Additionally, for companies with 25-99 employees, 80% offer health benefits. Smaller businesses were less likely to offer coverage: of those with 10-14 employees, 54% offered health benefits in 2022; and of the smallest companies, with fewer than 10 employees, 25% offer health benefits.
The effect of ACA
The numbers on insurance offered by employers have changed little since 2013. One of the predictions about the ACA was that the establishment of new insurance exchanges that would offer individual coverage would induce employers to drop private coverage for their employers and allow them to continue. individual market.
Shortly after the ACA was passed in 2010, numerous predictions were made that employers would drop coverage: The Congressional Budget Office (CBO) issued several predictions that between 5 and 20 million fewer people would have employment-based health insurance in 2019. due to fewer employers offering health insurance after the ACA, the report said. It added that other analysts predict that as many as 90 percent of workers with employment-based health insurance will switch to individual coverage in the public exchanges by 2014.
However, 23 years after the passage of the health reform law, employer-based private insurance remains the norm for most Americans. The report says trends show a slight decline in companies offering insurance overall: from 57% in 2008 to 48% in 2022. However, the number of American workers eligible for such plans has increased, from 78% of the workforce in 2008 .89% of the workforce in 2022. The report said the numbers suggest that providing health benefits is an effective way to attract workers: While increasing the offer rate is one reason more workers are eligible for coverage, we also found that workers are migrating into jobs which are more likely to offer health insurance.
Again, employers with the most workers largely offer health benefits. Large employers have stayed the course by continuing to offer health insurance to their workers, the report said. Almost all large employers offered health insurance before the ACA was passed and will continue to do so until 2022.
Small and medium enterprises recorded more fluctuations. For example, for employers with fewer than 10 employees, the percentage of coverage offered fell from 28% in 2013 to 22% in 2016, then recovered slightly to reach 25% in 2022.
KSEHRA and ICHRA will be rich (in benefits)?
Recent innovations in health plans include Qualified Small Employer Health Reimbursement (KSEHRA) plans that offer HRA, as well as Individual Coverage Health Reimbursement Arrangements (ICHRA). This new type of HRA remains in question as the Trump administration has predicted that 800,000 employers will take advantage of the new plans. So far, the EBRI report says, 2,500 employers have offered ICHRA in 2022, while close to 6,000 have offered KSEHRA. Although growth in these plans has continued, the report added that current results are far from the 800,000 forecast.
Related: Health care costs are the main driver of expected ACA premium increases in 2024.
The new arrangements come with their own potential complications: There is no question that the ICHRA provision gives employers the means to abandon traditional health insurance and go to [defined-contribution style] plan, the report states. One concern is that employers will try to structure their plans in a way that sends high-risk employees to the individual market. The regulations contain several provisions that prohibit such discriminatory practices. However, what if only employers facing the highest premiums in the group market adopted an HRA? If such a phenomenon were to occur, the non-group market would not become more stable and average premiums could increase. Conversely, in the group market, average premiums would decrease as higher risk groups leave.
Such questions have yet to be resolved. The EBRI report adds that many larger employers are not yet familiar with the ICHRA, and some remain skeptical of it. Figures from this latest report may suggest that American employers and workers are content to stick with tried-and-true health benefit arrangements, as they have remained relatively stable over the past decade.
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