Employers Willing to Share the Burden for Health Care Coverage

November 16, 2006 (PLANSPONSOR.com) - A recent study found that two-thirds of benefit managers surveyed agreed that "all employers should share in the cost of health insurance for employees, either by covering their own workers or by contributing to a fund to cover the uninsured."

According to a paper on the study resultspublished in the Journal of Health Affairs,even the majority (54%) of firms that did not currently offer employees health benefits agreed all employers should share the cost of health care coverage in some manner. The study found a willingness of both employers providing health care coverage and employers not providing coverage to participate in measures that would either require firms to implement administrative changes or make financial contributions.

When asked about a policy giving a tax credit to low-income workers to either buy their own insurance or pay for their share of premiums for their current employer’s offered coverage, four-fifths (81%) of firms surveyed stated they were very or somewhat willing to reduce an eligible employee’s withholding tax by the amount of any tax credit that might become available and 70% of firms stated they were very or somewhat willing to collect the tax credit and apply it to the employee’s premium share.

Employers were also willing to assist employee enrollment in government-administered health programs by making payroll deductions to cover state premiums (72%) and to educate low-income employees on how to apply for government-administered programs (90%). However, employers were less willing to support a program providing premium assistance to former workers electing COBRA coverage (46%). The study authors attributed the lower support to employers feeling this option would cost them more.

Just over one half of firms (51%) expressed interest in contributing to premiums to allow employees to participate in the state’s health insurance program for public employees or the federal program providing coverage for the members of Congress. Similarly, 51% of those surveyed said they would be interested in contributing toward premiums for having the option of allowing employees to participate in government-sponsored health insurance programs for low-income families.

Given options for the most beneficial strategy to reduce administrative costs to employers, insurers, and providers for providing health benefits, 22% of those surveyed said having universally accepted quality performance standards for providers would be most beneficial. Twenty-one percent said standardization of health benefits would be most beneficial, and 18% chose standardization of payment methods.

Joint purchasing of health insurance benefits by employers was chosen by 17% of respondents as being the most beneficial cost reduction strategy, while 15% chose joint purchasing by employers and public insurance programs.

The responsibility employers feel for providing health insurance coverage options for their employees could be explained by their view on the importance of this benefit to attracting and retaining qualified employees. Ninety-five percent of employers surveyed said health benefits were very or somewhat important for improving employee morale, and a similar number said health benefits were very or somewhat important for improving employee health. Most employers viewed health benefits as important for recruiting qualified workers.