Benefits June 14, 2001

Health Coverage for Low Earners Dwindles

June 14, 2001 (PLANSPONSOR.com) - Employer-sponsored health insurance benefits in the private sector have dropped over the last two decades, with low-wage workers most affected, according to a report from The Commonwealth Fund.
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In examining trends between 1979 and1998, the report, titled How the New Labor Market Is Squeezing Workforce Health Benefits, by the Center for National Policy, points out that:

  • two-thirds of private-sector workers had health coverage through their employers in 1979,
  • compared to just over half in1998

The decline was sharpest for those earning the least, with rates of own-employer coverage falling from 42% to 26% for workers in the lowest 20% of the wage scale, specifically:

  • the proportion of blue-collar employees receiving coverage through their own jobs fell from 63% to 43% over the period,
  • for white-collar workers, the number fell from 69% to 60%,
  • only 25% of workers earning less than $7.00 per hour had health benefits from their own employer in 1998,
  • compared with 80% of the top 20% of wage-earners received coverage.

Employees are now also more likely to pay a portion of their premiums. While 45% of employers paid the full share of premiums in 1983, only 26% did so in 1998.

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