Employment-Based Health Insurance Coverage Declining

October 21, 2011 (PLANSPONSOR.com) - Since 1995, the percentage of workers both with and without health insurance coverage has tracked closely with the unemployment rate, according to a new analysis of monthly data by the Employee Benefit Research Institute (EBRI). 

While the link between employment and health coverage is well-documented, EBRI’s new report tracks the data on a monthly basis to show the direct correlation. Currently, despite signs of economic recovery from the 2008−2009 recession, employment-based health insurance coverage remains well below the levels of the 1990s.

“Examining health insurance coverage and uninsured rates among workers on a monthly basis allows more accurate identification of changes in trends and can also more clearly indicate the effects of recessions and unemployment on changes in coverage,” said Paul Fronstin, the report’s author. “Although the link between health insurance coverage and employment has long been known, these data underscore the degree to which employment—or, more significantly, unemployment—rates directly affect the levels of the uninsured in the United States.”

Between December 1995 and December 2007, there was little change in the percentage of workers covered either in their own name or as a dependent. The percentage of workers with coverage in their own name increased slightly, from just below 60% in the second half of 1996 to slightly above 61% in 1998.

Between February 1998 and September 2002, the percentage of workers with coverage in their own name fluctuated between 60.5% and 61.8%. Then a gradual decline in coverage started in October 2002, and between January 2004 and December 2007 the percentage of workers with coverage in their own name remained mostly below 60%.

The recent economic recession started in December 2007, and between December 2007 and May 2008 the percentage of workers with coverage in their own name fell from 60.4% to 56.8%. There are no data in between to determine if this was a gradual trend or a one-time drop. The period between May 2008 and May 2009 shows a continuing decline in the percentage of workers with employment-based coverage in their own name.

Full details are published in the October EBRI Notes, available at www.ebri.org