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Employer-based coverage rates drop, healthcare costs rise

Posted on February 28th, 2013 Read time: 1 minutes

As employers and HR administration professionals shift their attention towards future changes mandated by the Affordable Care Act, a recent report from the U.S. Census Bureau reveals a sharp decline in the rate of employment-based health insurance coverage.

Between 1997 and 2010, employer-sponsored healthcare benefits declined from roughly 64 percent to 57 percent. Individual coverage dropped approximately 6 percentage points from 76 percent to roughly 70 percent. During the same time period, the employment-based coverage rate for people outside of the labor force from about 34 percent to 31 percent.

According to a statement released by the Census Bureau, the likelihood of being covered by an employer increased with family income.

While the majority of full-time workers still depend on their organization's healthcare offerings, a separate study by Aon Hewitt, an HR software provider, revealed the way companies administer benefits will likely change soon.

Despite the decline in the number of workers receiving coverage, healthcare costs for employers have risen 40 percent in past six years to an average of $8,800 a year per worker.

Confronted with these costs, nearly 40 percent employers plan to adopt a model in which employees who exhibit healthy lifestyles or show progress in achieving wellness goals will be rewarded with premium cuts.

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