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Dive Brief:
- Employment-based health insurance remains the primary source of coverage for Americans under 65, covering approximately 60% of the population, according to a recent report from the Employee Benefit Research Institute (EBRI).
- The percentage of employers offering health coverage increased slightly to 49% in 2024, up from 46.3% the previous year.
- This increase in coverage was primarily driven by large employers (those with over 100 employees), while coverage rates decreased among smaller businesses.
Dive insight:
EBRI’s research highlights that the overall rate of employer-sponsored coverage is substantially impacted by the decisions of small businesses, which constitute the majority of employers in the United States.
paul Fronstin, director of health benefits research at EBRI, cautioned that rising healthcare costs pose a significant threat to small businesses’ ability to continue offering health insurance. “If health insurance premiums rise faster than wages and general inflation, small employers are likely to face intensified financial strain, which coudl accelerate the erosion of health plan sponsorship among firms with fewer than 100 workers,” Fronstin stated in a press release.
Large employers may attempt to mitigate rising costs by shifting more expenses onto employees through higher deductibles, increased coinsurance, or narrower provider networks. Fronstin noted that while this could maintain offer rates, it could also reduce the value of coverage, leading to lower enrollment and increased financial insecurity for workers. “That could preserve offer rates but reduce the value of coverage, potentially lowering take-up. For workers, the impact could be significant, meaning higher out-of-pocket costs, greater reliance on public programs and increased financial insecurity tied to health care expenses,” he explained.