Higher Costs + Fewer Jobs = Less Health Coverage: BLS

September 22, 2003 (PLANSPONSOR.com) - The number of Americans covered by employer-sponsored health insurance has dropped dramatically over the past decade - and those that are covered are paying significantly more for that coverage, according to a new report.

Less than half (45%) of US workers are covered by employer-sponsored medical care plans currently, compared with nearly two-thirds (63%) in 1992-93, according to data from the Labor Department’s Bureau of Labor Statistics.

Some of the drop was the result of soaring insurance premiums. In fact, the report said there was a 75% increase in premiums paid by employees for their share of health coverage over the past decade, outpacing wages or inflation.

Pay Cuts

In part, the shift in coverage is a result of recent layoff patterns. The BLS noted that manufacturers, which have cut their payrolls significantly in recent years, were more likely to offer

employer-paid coverage than service industry employers, by a margin of 57% to 42%. In fact, while half of workers in blue-collar jobs have health insurance, only about one-in-five (22%) of lower-wage workers are covered in service occupations such as waitresses, dental assistants, security guards, or child-care workers.

The BLS report revealed that higher-paid employees paid less on average toward their premiums than lower-paid workers. Specifically, workers earning an average of less than $15/hour reported an average monthly contribution for family coverage of $238.41, compared with $220.04 for employees earning $15/hour or more. For single coverage, the premium was $62.92 compared with $57.75 for those earning $15 an hour or more.

Size Shifts

Firms with 100 or more workers were more likely to offer all types of insurance than smaller firms, with 55% of the former offering medical coverage versus just 36% at smaller firms. Similarly, 44% of employees in larger firms participated in dental coverage, compared with just 21% in smaller firms. In March 2003, a third (32%) of employees participated in dental coverage, while nearly one-in-five (19%) were covered by vision care plans.

Additionally, while18% of employees have access to employer assistance for child care, just 5% offer on-site child-care facilities, and just 3% provide funds for child care. The BLS data indicated that only 4% of employees had access to what the survey called a “flexible workplace” in March 2003 (a.k.a. telecommuting), and white-collar workers were much more likely (16%) than blue-collar workers (1%) to have access to those offerings.

Participation Rates

The report also documented trends in retirement plan coverage, noting that while participation rates remained relatively steady (at about 49% as of March 2003), the mix is shifting – with defined benefit programs now covering a smaller portion of workers than a decade ago (20%), while defined contribution plans now cover a larger portion (40%). The BLS noted that many employees still had access to both program types.

The 2003 benefits survey results were obtained from 2,924 private industry establishments, representing 103 million workers, nearly 79 million of which were full-time workers.

The latest employee benefit report is available on BLS’s Web site at: http://www.bls.gov/news.release/pdf/ebs2.pdf