2018 Employer Health Benefits Survey
Section 3: Employee Coverage, Eligibility, and Participation
Employers are the principal source of health insurance in the United States, providing health benefits for about 152 million non-elderly people in America.12 Most workers are offered health coverage at work, and the majority of workers who are offered coverage take it. Workers may not be covered by their own employer for several reasons: their employer may not offer coverage, they may not be eligible for the benefits offered by their firm, they may elect to receive coverage through their spouse’s employer, or they may refuse coverage from their firm. In 2018, 60% of covered workers in firms offering health benefits are covered by their own firm, similar to the percentage in recent years, but lower than the percentage ten years ago (65%).
Before eligible workers may enroll in benefits at their firm, 71% of covered workers face a waiting period.
ELIGIBILITY
- Even in firms that offer health benefits, some workers may not be eligible to participate.13 Many firms, for example, do not offer coverage to part-time or temporary workers. Among workers in firms offering health benefits in 2018, 79% are eligible to enroll in the benefits offered by their firm, similar to the percentages last year and the recent past for both small and large firms [Figure 3.1].
- The percentage of workers eligible to enroll in health benefits at their firm is relatively higher in firms with 3-24 workers (83%) and firms with 200-999 workers (82%), and relatively lower in firms with 5,000 or more workers (75%) [Figure 3.3].
- Eligibility varies considerably by firm wage level. Workers in firms with a relatively large share of lower-wage workers (where at least 35% of workers earn $25,000 a year or less) are less likely to be eligible for health benefits than workers in firms with a smaller share of lower-wage workers (61% vs. 81%) [Figure 3.5].
- Workers in firms with a relatively large share of higher-wage workers (where at least 35% earn $62,000 or more annually) are more likely to be eligible for health benefits than workers in firms with a smaller share of higher-wage workers (86% vs. 73%) [Figure 3.5].
- Eligibility also varies by the age of the workforce. Those in firms with a relatively small share of younger workers (where fewer than 35% of the workers are age 26 or younger) are more likely to be eligible for health benefits than those in firms with a larger share of younger workers (81% vs. 63%) [Figure 3.5].
- Eligibility rates vary considerably for workers in different industries. The average eligibility rate is particularly low in retail firms (48%) [Figure 3.3].
Figure 3.1: Eligibility, Take-Up, and Coverage Rates for Workers In Firms Offering Health Benefits, by Firm Size, 1999-2018
Figure 3.2: Eligibility and Coverage Rates for Workers In Firms Offering Health Benefits, 1999-2018
Figure 3.3: Eligibility, Take-Up, and Coverage Rates In Firms Offering Health Benefits, by Firm Size, Region, and Industry, 2018
Figure 3.4: Eligibility, Take-Up, and Coverage Rates In Firms Offering Health Benefits, by Firm Size, 2018
Figure 3.5: Among Workers In Firms Offering Health Benefits, Percentage of Workers Eligible for Health Benefits Offered by Their Firm, by Firm Characteristics, 2018
TAKE-UP RATE
- Seventy-six percent of eligible workers take up coverage when it is offered to them, similar to the percentage last year [Figure 3.1].14 Eligible workers in large firms (200 or more workers) are more likely to take up coverage when offered than eligible workers in small firms (3-199 workers) (78% vs. 73%) [Figure 3.3].
- The likelihood of a worker accepting a firm’s offer of coverage varies by firm wage level. Eligible workers in firms with a relatively small share of lower-wage workers are more likely to take up coverage than eligible workers in firms with a larger share of lower-wage workers (79% vs. 54%) [Figure 3.6].
- Eligible workers in firms with a relatively large share of higher-wage workers are more likely to take up coverage than those in firms with a smaller share of higher-wage workers (81% vs. 72%) [Figure 3.6].
- Eligible workers in firms with a relatively large share of older workers (where at least 35% of the workers are age 50 or older) are more likely to take up coverage than those in firms with a smaller share of older workers (80% vs. 74%) [Figure 3.6].
- The percentage of eligible workers taking up benefits in offering firms also varies considerably by industry. The average take-up rate is lower in agriculture/mining/construction firms (67%) than firms of other industries [Figure 3.3].
- The share of eligible workers taking up benefits in offering firms (76%) has decreased over time, from 80% in 2013 and 82% in 2008 [Figure 3.1].
Figure 3.6: Among Workers In Firms Offering Health Benefits, Percentage of Eligible Workers Who Take Up Health Benefits Offered by Their Firm, by Firm Characteristics, 2018
COVERAGE
- In 2018, the percentage of workers at firms offering health benefits covered by their firm’s health plan is 60%, similar to the percentage last year [Figures 3.1 and 3.2].
- The coverage rate at firms offering health benefits is the same for small firms and large firms in 2018. These rates are similar to the rates last year for both small firms and large firms [Figure 3.1].
- There is significant variation by industry in the coverage rate among workers in firms offering health benefits. The average coverage rate is particularly low in retail (35%) and service (55%) industries [Figure 3.3].
- There also is variation by firm wage levels. Among workers in firms offering health benefits, those in firms with a relatively large share of lower-wage workers are much less likely to be covered by their own firm than workers in firms with a smaller share of lower-wage workers (33% vs. 64%). A comparable pattern exists in firms with a relatively large share of higher-wage workers, with workers in these firms being more likely to be covered by their employer’s health benefits than those in firms with a smaller share of higher-wage workers (70% vs. 53%) [Figure 3.7].
- The age profile of workers is also related to variation in coverage rates. Among workers in firms offering health benefits, those in firms with a relatively small share of younger workers are more likely to be covered by their own firm than those in firms with a larger share of younger workers (63% vs. 44%). Similarly, workers in offering firms with a relatively large share of older workers are more likely to be covered by their own firm than those in firms with a smaller share of older workers (65% vs. 56%) [Figure 3.7].
- Among workers in all firms, including those that offer and those that do not offer health benefits, 53% are covered by health benefits offered by their employer, similar to last year, but lower than the coverage rate in 2008 (60%) [Figure 3.8].
Figure 3.7: Among Workers In Firms Offering Health Benefits, Percentage of Workers Covered by Health Benefits Offered by Their Firm, by Firm Characteristics, 2018
Figure 3.8: Percentage of Workers Covered by Their Firm’s Health Benefits, 1999-2018
Figure 3.9: Percentage of All Workers Covered by Their Firm’s Health Benefits, Both In Firms Offering and Not Offering Health Benefits, by Firm Size, 1999-2018
WAITING PERIODS
- Waiting periods are a specified length of time after beginning employment before workers are eligible to enroll in health benefits. With some exceptions, the Affordable Care Act (ACA) requires that waiting periods cannot exceed 90 days.15 For example, employers are permitted to have orientation periods before the waiting period begins which, in effect, means a worker is not eligible for coverage three months after being hired. If a worker is eligible to enroll on the 1st of the month after three months of employment, this survey rounds up and considers the firm’s waiting period four months. For these reasons, some employers still have waiting periods exceeding the 90-day maximum.
- Seventy-one percent of covered workers face a waiting period before coverage is available, similar to last year [Figure 3.12]. Covered workers in small firms are more likely than those in large firms to have a waiting period (81% vs. 67%) [Figure 3.10].
- The average waiting period among covered workers who face a waiting period is 1.9 months [Figure 3.10]. A small percentage (4%) of covered workers with a waiting period have a waiting period of more than 3 months.
- Respondents with waiting periods greater than 4 months generally indicated that employees had training, orientation, or measurement periods in which they were employees but were not eligible for health benefits. Some employers have measurement periods to determine whether variable hour employees will meet the requirements for the firm’s health benefits.16
Figure 3.10: Percentage of Covered Workers In Firms With a Waiting Period for Coverage and Average Waiting Period In Months, by Firm Size, Region, and Industry, 2018
Figure 3.11: Distribution of Covered Workers With the Following Waiting Periods for Coverage, by Firm Size, 2018
Figure 3.12: Percentage of Covered Workers In Firms With a Waiting Period for Coverage, by Firm Size, 2002-2018
Figure 3.13: Among Covered Workers With a Waiting Period for Health Benefits, Average Waiting Period In Months, by Firm Size, 2002-2018
- The Uninsured: A Primer – Key Facts about Health Insurance and the Uninsured Under the Affordable Care Act. Washington (DC): The Commission; 2017 Dec (cited 2018 July 30). https://www.kff.org/uninsured/report/the-uninsured-a-primer-key-facts-about-health-insurance-and-the-uninsured-under-the-affordable-care-act/. See supplemental tables – Table 1: 271.1 million non-elderly people, 56.2% of whom are covered by employer-sponsored insurance (ESI).↩
- See Section 2 for part-time and temporary worker offer rates.↩
- In 2009, we began weighting the percentage of workers that take up coverage by the number of workers eligible for coverage. The historical take-up estimates have also been updated. See the Survey Design and Methods section for more information.↩
- Variable hour employees may have a measurement period of up to 12 months before it is determined if they are eligible for benefits. Employers may require a cumulative service requirement of up to 1,200 hours before an employee may enroll. Federal Register. Vol. 79, No. 36. Feb 12, 2014. https://www.gpo.gov/fdsys/pkg/FR-2014-02-24/pdf/2014-03809.pdf↩
- Under the ACA, employers may determine whether or not an employee is a full-time employee by looking back at the number of hours an employee has worked during a defined period. See https://www.irs.gov/affordable-care-act/employers/identifying-full-time-employees↩