Workers Increasingly Decline Employer-Provided Health Benefits

Growing numbers of workers are declining an employer’s offer of health insurance largely because they cannot afford to pay their share of premiums, according to a study conducted for the Robert Wood Foundation by the State Health Access Data Assistance Center at the University of Minnesota.

Using trend data from 1998 to 2003 on employer-sponsored health insurance from the Medical Expenditure Panel Survey—Insurance Component (MEPS-IC), researchers found that the percentage of eligible employees nationwide who enrolled in their employers’ health plans fell from 85.3% in 1998 to 80.3% in 2003.

Broken down by state, the biggest declines in the percentage of employees accepting an offer of employer-provided health insurance between 1998 and 2003 were observed in New Jersey (-12%), Nebraska (-11%), Wisconsin (-9%), Colorado (-9%), and Iowa (-9%).

The analysis showed that, throughout the period studied, employers paid, on average, 82% of their workers’ health plan premiums, with employees picking up 18% of the cost. However, the premiums paid by individuals rose from $2,454 in 1998 dollars adjusted for inflation to $3,481 in 2003, representing an increase of 42%.

Commenting on the findings, Risa Lavizzo-Mourey, M.D., president and CEO of the Robert Wood Johnson Foundation, said, "This report should be as alarming to Congress as it is to the American people, because employer-sponsored health insurance is the backbone of America’s health care system."

Lavizzo-Mourey added, "As costs go up, fewer individuals and families have insurance and fewer businesses can afford to provide coverage for their employees, which means the number of uninsured Americans will continue to increase. It is way past time for our national leaders to take action."