By Matt Valeta, CCHI Health Policy Fellow
Employer sponsored insurance is on the decline in the United States. The percentage of Americans who are insured through their employer has dropped from 61.6% to 55.9% since 2008 according to a new Gallup poll.
Employer-sponsored insurance is the main source of coverage for Americans with 157 million people under the age of 65 receiving coverage through an employer.
Colorado has matched the national trend of declining employer-sponsored health insurance. In 2009, 63.7% of Coloradans were insured through their employer. Today the number of employer insured Coloradans has fallen to 57.8%.
Affordability for employers is one of the main factors driving the decrease in the employer-sponsored insurance in Colorado. Today employer-sponsored family insurance premiums cost $13,360 a year. This is an increase of 83% since 2001.
With costs this high for employer-sponsored insurance, 56% of Coloradans who opted out of employer-sponsored insurance coverage said they did so because they could not afford their share of the premiums.
BUT There is one bright spot in Gallup poll. The number of 18 to 25 year olds receiving health insurance from employer-sponsored coverage has risen since 2011 from 31.1% to 31.9%. This is due to the provision in Obamacare that allows young adults under the age of 26 to stay on their parent’s coverage.
Obamacare contains several other provisions that will both support access to employer-sponsored health insurance and bring down insurance costs.
- Health insurance exchanges will offer relief for the costs of employer-sponsored health insurance. Colorado is currently developing a Small Businesses Health Options Program (SHOP). The SHOP will function as clearing house where insurers will compete for small employers (50 or fewer employees) business, thus spreading the risk for participating employers. The goal is to make shopping for insurance both cheaper and easier for small business owners. The SHOP will be operational in Colorado in October of 2013 and be expanded to larger employers (of 100 employees or fewer) in the future.
- Small-group tax credits of up to 35% of the employer’s health insurance costs are available now for businesses that have 25 or fewer employees and whose employees earn on average less than $50,000 a year. The credit will increase to 50% in 2014, and will only be available to employers using the SHOP exchange.
- After 2014 employers with 50 or more full-time employees are required to offer health insurance meeting certain standards or face a tax penalty.
Coloradans have and will continue to get health insurance through their employers. Obamacare is helping to slow the trend of employers dropping insurance coverage for their employees and is instead making it easier and more affordable to offer insurance. Obamacare will help create a healthier, more productive Colorado.