Employer-Sponsored Insurance Coverage: Background
In 2007, over 115 million adults and 43 million children received health insurance through an employer, 1 making it the most common form of coverage in the United States. Employers offer benefits voluntarily, often to attract and retain qualified workers while providing their employees with some financial protection against injury or illness. The employer contribution to the premium lowers the cost for the family, enabling many to purchase coverage that would otherwise have been unaffordable. In addition, the coverage tends to be more generous than what is available in the individual market and the employer contribution towards premiums is tax-exempt. Employer-sponsored coverage (ESI) also has the added benefit of pooling the health risks of a diverse workforce, particularly for larger employers.
In recent years, however, the percentage of all workers offered coverage through their jobs has declined and to an even greater extent among low-income workers.2 The decline is driven, in large part, by increases in the cost of ESI. For example, between 1999 and 2007 the total premium for family-based ESI coverage increased from $5,742 to $12,608.3
The amount of the premiums that employees contribute has almost doubled over the same time period (although the employee share has remained relatively constant at about 27 percent). Such premium increases have outpaced the growth in workers’ earnings; from 1999 to 2008, the cost of health insurance premiums rose a cumulative 119 percent, while earnings increased only 27 percent.4
Dependent Coverage
There is no requirement that employers offer family coverage (or coverage at all), and employers can decide how much, if anything, they will contribute to the cost of coverage for dependents. In general, the ESI system is family-based and most employers offer coverage to the dependents of their workers, including spouses and children, at an increased cost to the employee.
The fastest growing segment of the uninsured population is young adults between the ages of 19 and 29. Commonly, children who are covered by their parents through ESI, lose dependent health care coverage when they are 19 or are no longer a full-time student.5
The Changing Definition of “Dependent:” Who is Insured and For How Long
National Conference of State Legislatures
This web publication provides state-by-state information on how long a child remains a qualified dependent, as well as recent state activity to extend these benefits.
Health Insurance Coverage of Young Adults: Issues and Broader Considerations
John Holahan and Genevieve Kenney, Urban Institute
This issue brief examines the root causes of uninsurance among young adults and policy options to address the coverage gap they face.
For more see Employer-Sponsored Insurance Coverage: Data and ResourcesFootnotes
1. Urban Institute and Kaiser Commission on Medicaid and the Uninsured analysis of the Census Bureau's March 2008 Current Population Survey. Back
2. B. DiJulio & P. Jacobs, "Change in Percentage of Families Offered Coverage at Work, 1998-2005," Kaiser Family Foundation (July 2007). Back
3. The Kaiser Family Foundation and Health Research and Educational Trust, "Employer Health Benefits: 1999 Annual Survey" (October 1999); and the Kaiser Family Foundation and Health Research and Educational Trust, "Employer Health Benefits: 2008 Annual Survey" (September 2008). Back
4. Center for Children and Families analysis of Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2008; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 1999-2008 (April to April). Back
5. National Conference of State Legislatures, "Covering Young Adults Through Their Parent's or Guardian's Health Policy" (February 2008). Back