Insight & Analysis / Looking Ahead: Employer-Sponsored Insurance in Colorado
Dr. Ezekiel Emmanuel earlier this year predicted that by 2025, fewer than 20 percent of workers in the private sector will receive traditional employer-sponsored health insurance.
Dr. Emmanuel is not alone in his prediction. Over the past several months, the future of employer-sponsored insurance has been a hot topic. A recent projection from the research firm S&P Capital IQ predicted that by 2020 about 90 percent of workers currently covered by employer-sponsored insurance will be shifted to the insurance marketplaces created by the Affordable Care Act.
The premise behind these projections is this: Health insurance was once a coveted perk offered by employers to recruit talent. But its importance has declined now that people can more easily shop for their own insurance – regardless of any pre-existing conditions.
As a result, more employers may get out of the insurance business and instead give their employees a stipend to purchase coverage, cutting down on the administrative burden and potentially saving the company money. On the other hand, employers may be reluctant to do that because of the ACA’s employer mandate. Large employers face a penalty if they don’t provide coverage and small employers are eligible for a tax credit if they do.
Amid all the conjecture about the ACA is the data provided by the 2013 Colorado Health Access Survey (CHAS). The data tell us what coverage looked like before key provisions of health care reform were implemented in January 2014. We can use these data as a baseline for tracking trends in employer-sponsored coverage as time progresses.
- The majority of Coloradans are covered by employer-sponsored insurance. Among all Coloradans, 59.0 percent were covered by employer-sponsored insurance. This was an increase from the 2011 rate (57.8 percent), but was not as high as the 2009 rate – 63.7 percent.
- The CHAS asked employed Coloradans between the ages of 19 and 64 about the availability of employer-sponsored insurance at their workplace. Of this group, 86.2 percent said that their employer offered health insurance as a benefit. However, availability varied among companies of different sizes.
- Large employers with more than 50 full-time employees are required under the ACA to offer coverage or face penalty. According to the CHAS, 94.8 percent of Coloradans who worked for a large employer said that health insurance was offered. Just over 58 percent of Coloradans who worked for a small employer – 50 or fewer employees – said insurance was offered. Companies of this size are not required to offer health insurance to employees.
Is employer-sponsored insurance on the decline in Colorado? Time – and the next few years of CHAS data – will tell. Stay tuned.