Health insurance is evolving, and so is the role of employers who provide health insurance benefits. During World War II, when wage controls were in place, companies began offering health insurance to attract workers from a scant pool of workers. But the market is changing.
Today, even though there’s evidence that employers are moving away from covering health insurance, over half of the non-elderly population in the US is covered by employer health benefits. Small businesses are less likely to offer health insurance coverage.
Trends in Employer-Provided Health Benefits
- Large employers are penalized if they don’t offer health insurance coverage. With the Affordable Care Act, a company with 50 or more full-time employees that does not offer at least minimal health insurance to full-time workers may be subject to an Employer Share Responsibility payment to the IRS.
- Employers are shifting insurance costs to employees. According to the Kaiser Family Foundation, premiums increased by 61% from 2005 to 2015; worker contribution increased 83% during that same period.
- Workers have higher deductibles and pay a larger portion of health insurance expenses. Health care costs and risks are being spread among employers, insurance carriers and employees. This is one reason employees are now paying higher copays, coinsurance and premium costs.
- Companies are discouraging spousal inclusion on employee coverage. If a spouse has access to other insurance, some employers may charge the employee extra or pay the employee a bonus for not including the spouse.
- Employees are incentivized to find the best price. Some companies pay employees a fixed amount with defined-contribution plans. The ACA establishes public exchanges where individuals receive subsidized coverage from the government. Private exchanges work similarly, with workers receiving set amounts from their employers. This approach encourage employees to shop around for the best price
- Health savings accounts (HSAs) are gaining traction. Both employers and employees pay into the accounts. Funds are valued as pre-tax, earn investment returns, and accumulate. HSAs also let employees roll the money over from one year to the next.
- Employees are being rewarded for healthy lifestyles and penalized for poor health habits. For example, some large corporations give workers rebates for healthy lifestyles, and the Affordable Care Act penalizes smokers with surcharges.
A variety of health insurance options offer everything from health, dental and vision to long-term care, Medicare, travel and health savings accounts. Shop for and compare plans online.