Employers are the primary source of health insurance in the U.S., covering 62% of all employees (including both full and part-time) (Exhibit 3.1). ⁸  While other workers may have coverage through their spouse's job, many do not have that option. Census Bureau estimates report that nearly one in five workers is uninsured. ⁹

The primary reason workers are uninsured is because their employers do not offer health benefits, particularly in small businesses. Yet, even in businesses that offer coverage, some employees are ineligible for that coverage or do not sign up because they must pay a significant share of the premium.

• Among firms offering health benefits, 68% of workers are covered by their firm's health plan, a similar rate to last year (Exhibit 3.2).
  
  
  • Coverage rates do not differ significantly by firm size, but they do vary by industry, likely due to differences in eligibility. The coverage rate for workers in the retail industry is 45%, compared to coverage rates of 82% for state and local government workers and 77% for those working in the transportation, communication, and utility industries (Exhibit 3.2).
  • Higher wage firms (fewer than 35% of workers earn $20,000 or less annually) have higher coverage rates than lower wage firms (35% or more of workers earn $20,000 or less annually). Seventy-one percent of workers are covered in higher wage firms that offer health bene- fits, compared with 51% of workers in lower wage firms offering benefits.

• Not all employees are eligible for their firm's health benefits and not all who are eligible choose to participate in them. The number of workers covered is a product of both the percentage of workers who are actually eligible for the firm's health insurance and the percentage who choose to "takeup" (i.e., elect to participate in) the benefit (Exhibit 3.2).
  
• • In firms offering benefits, 84% of small firms' (3-199 workers) employees and 80% of all large firms' (200 or more workers) employees are eligible for health benefits, statistically unchanged from last year.
  • Participation (the take-up rate) is high across all firm sizes at 83%.
  • Small firms' (10-49 workers) workers have a lower than average take-up rate (76%), as do retail workers (72%). Take-up rates are higher in transportation, communication, and utility firms (89%) and in state and local governments (92%).

[8] As discussed in the section on Survey Design and Methods, revisions in the sample design have increased the level of the coverage rate reported for this year and prior years, in large part because the influence of small employers (who are less likely to cover their workers) on the total results has been reduced.

[9] U.S. Census Bureau estimates based on the March 2002 Current Population Survey report that 15% of all individuals in the U.S. are uninsured and that 14% of the non-elderly uninsured are in households with at least one worker.