More Employees Opt for Health Care Benefits

May 30, 2001 ( - Skyrocketing health insurance premiums led to an increase in the number of workers signing up for employer-provided health insurance in 1998 and 1999, according to a recent study.

The study, released by the Employee Benefits Research Institute, showed that the number of US workers choosing to participate in employer-based health plans increased by 1.1% between 1994 and 1999 to reach 72.2% of workers.

The low unemployment rate of 4.5%, and an increase in the number of small businesses offering coverage, up 13% between 1998 and 2000, can be attributed to the rise.

Passing on Increases

Researchers predict that employers will pass on the cost increases to employees when they sign up for health care this fall, a reversal of a trend, which has seen the employee share of the overall health care premiums drop from 21% to 14% since 1996.

A recent study by William M. Mercer found that employees in preferred provider organizations at companies with more than 500 workers would pay about $53 a month in 2002, up 11% from this year.

However, many small employers are compelled to pay for most, if not all, of their employees’ premiums to ensure they have the minimum number of participants to qualify for insurance.