Trend Watch: Employee Health Benefit Enrollment Continues To Drop

The number of workers enrolling in company-sponsored health insurance plans is at an all-time low.

A poll conducted by Gallup and Healthways found that in 2011, 44.6 percent of employees were enrolled in their employer’s health insurance plan. While that percentage has been steadily dropping since the poll began in 2008, the newest finding is the lowest yet.

So why are fewer workers taking advantage of employee health benefits? Gallup suggests that because unemployment and underemployment have increased since 2008, fewer employees have had access to an employer-sponsored plan.

But those already in the workforce are also becoming less likely to take advantage of health insurance plans. The Gallup Poll identifies two major contributing factors for opting out of employee health benefits.

First is that employers cannot absorb the expense of offering employees health benefits and reducing their health insurance offerings. The other factor is that employees simply cannot afford the rising cost of health care with its higher premiums, higher deductibles and higher out-of-pocket expenses.

Who is Opting In?

Gallup found that among those with health insurance who didn’t work for the government and weren’t eligible for government plans, 57.1 percent still received their health care benefits from employers.Higher earners are much more likely to be enrolled in an employer’s plan than are lower earners.Young adults and Hispanics are the least likely to be enrolled in their employer’s health care plan, according to the findings of the Gallup poll.

Who is Opting Out?

As the number of workers opting for company health care benefits falls, the number of uninsured Americans continues to rise. Gallup found that 17.1 percent of Americans are uninsured. That is the highest percentage of uninsured since the inaugural survey in 2008.

Small businesses may soon be on the hook to fill this gap in coverage. The Affordable Health Care Act contains something called the individual mandate, which will require most Americans to purchase health insurance by the year 2014. The businesses themselves may have to adjust to higher health care costs as they share in the expense of adding employees to the company plan.

The experts at Gallup believe that until that point in 2014, the number of workers enrolling in company health insurance plans will continue to fall and the number of uninsured people will continue to rise.

The U.S. Supreme Court isn’t expected to release a ruling until sometime in June. If the Court upholds the mandate, more employers will be required to offer benefits that include employee health insurance plans and more employees may look to their employers for health care coverage.

Fewer people are signing on for company-sponsored health care coverage and more people than ever before are simply uninsured. What remains to be seen is if the Affordable Care Act changes those trends. If Americans are required to buy health insurance or face penalties, will more of them look once again to their employers for health care coverage? And is your small business ready to absorb the costs?

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