The Kaiser Family Foundation and The Health Research and Educational Trust (Kaiser/HRET) conduct this survey of employer-sponsored health benefits, which was supported for many years by the international consulting and accounting firm Bearing Point (formerly known as KPMG). In 1998, KPMG divested itself of its Compensation and Benefits Practice, and part of that divestiture included donating the annual survey of health benefits to HRET. HRET is a non-profit research organization affiliated with the American Hospital Association. The Kaiser Family Foundation provides financial support and conducts this survey in partnership with HRET. The Foundation provides independent research and analysis on health policy issues, and is not affiliated in any way with the Kaiser Permanente health plan or Kaiser Industries. Each company participating in the Kaiser/HRET survey is asked as many as 400 questions about its largest conventional or indemnity, health maintenance organization (HMO), preferred provider organization (PPO), and point-of-service (POS) health plans. This year's survey included questions on the cost of health insurance, offer rates, coverage, eligibility, health plan choice, enrollment patterns, premiums, employee cost sharing, covered benefits, prescription drug benefits, retiree health benefits, defined contributions, and views on health policy issues.
Kaiser/ HRET retained National Research LLC (NR), a Washington, D.C.-based survey research firm, to conduct telephone interviews with human resource and benefits managers. NR conducted interviews from January to May 2003.
Response Rate
Kaiser/HRET drew its sample from a Dun & Bradstreet list of the nation's private and public employers with three or more workers. To increase precision, Kaiser/HRET stratified the sample by industry and the number of workers in the firm. To improve comparability, repeat interviews were attempted with many of the 2,365 firms with at least 10 employees interviewed in either 2002 or 2001. As a result, 1,359 firms in this year's total sample of 1,856 firms participated in either the 2001 or 2002 surveys.1 The overall response rate was 50%.
Previous years' experience illustrated that firms that decline to participate in the study are more likely not to offer health coverage. Therefore, one question was asked of all firms where the individual most responsible for the company's health benefits declined to participate in the full survey. The one question was, "Does your company offer or contribute to a health insurance program for your employees?" A total of 2,808 firms responded to the one offer question (including 1,856 who responded to the full survey and 952 who responded only to the one question. Their responses are included in the estimates of the percentage of firms offering health coverage. The response rate for this question was 76%.
Rounding and Imputation
Throughout the report, exhibits categorize data by industry, size of firm, and region. Firm size definitions are as follows: 3-9 workers, small; 10-24 workers, small; 25-49 workers, small; 50-199 workers, small; 200-999 workers, midsize; 1,000-4,999 workers, large; and 5,000 or more workers, jumbo. Occasionally, firm size categories will be aggregated: 3-199 workers, all small; 200 or more workers, all large.
Exhibit M.1 shows detailed characteristics of the sample.
Exhibit M.2 displays the distribution of the nation's firms, workers, and covered workers (employees receiving coverage from their employer). Among the over 3 million firms nationally, approximately 60% are firms employing 3-9 workers, representing eight percent of workers.2 In contrast, jumbo firms, defined as firms with 5,000 or more workers, employ and cover about 40% of employees, but are less than one percent of all firms. In general, firms with 3-199 workers represent 98% of all firms but only 38% of all workers, while larger firms (200 or more workers) are only two percent of all firms but employ 62% of all workers. Therefore, the smallest firms dominate national statistics about what employers in general are doing. In contrast, jumbo employers are the most important employer group in calculating national statistics regarding the typical employee or covered worker, since they employ the largest percentage of the nation's workforce.
Some exhibits in Health Benefits 2003 do not add up to 100 percent due to rounding effects. Throughout the report, while overall totals as well as totals for size and industry are statistically valid, some breakdowns may not be available due to limited sample sizes. In these instances, exhibits include the notation NSD (Not Sufficient Data).
To control for item nonresponse bias, Kaiser/HRET traditionally identifies a select set of key variables as needing complete information from all surveyed firms. These variables include percentage changes in premium costs for family coverage, premium amounts, worker contribution amounts, self-insurance status, level of benefits, prescription drug cost sharing, co-pay and coinsurance amounts for prescription drugs, and firm workforce characteristics such as the proportion of low wage workers and part-time status. On average, less than five percent of these observations are imputed for any given variable. The imputed values are determined based on the distribution of the reported values within stratum defined by firm size and region.
[1] In total, 360 firms participated in 2002 and 2003, 142 firms participated in 2001 and 2003, and 857 firms participated in 2001, 2002, and 2003.
[2] As discussed above, the firm distribution shown in this year's summary is based on data from the Census Bureau. In previous years, the firm distributions was taken directly from the Dun and Bradstreet database. This change decreases the percentage of 3-9 firms from 74% to 60%.
