2017 Employer Health Benefits Survey
Section 2: Health Benefits Offer Rates
While nearly all large firms (200 or more workers) offer health benefits to at least some employees, small firms (3-199 workers) are significantly less likely to do so. The percentage of all firms offering health benefits in 2017 (53%) is similar to the percentage of firms offering health benefits last year (56%), but lower than the percentages of firms offering health benefits in 2007 (59%) and 2012 (61%). As we reported last year, there has been a long-term decline in the offer and coverage rates for employer-provided coverage, particularly among smaller firms.13
Firms not offering health benefits continue to cite cost as the most important reason they do not do so. Almost all firms that offer coverage offer to dependents such as children and the spouses of eligible employees.
FIRM OFFER RATES
- In 2017, 53% of firms offer health benefits, similar to the 56% who reported doing so in 2016 [Figure 2.1].
- Ninety-nine percent of large firms offer health benefits to at least some of their workers. In contrast, only 53% of small firms offer health benefits in 2017 [Figures 2.2 and 2.3]. The percentages of both small and large firms offering health benefits to at least some of their workers are similar to those of last year [Figure 2.2].
- The overall percentage of firms offering coverage in 2017 is less than the percentage offering coverage in 2012 (61%) and 2007 (59%) [Figure 2.1]. As we reported last year, there has been a long-term decline in the offer and coverage rates for employer-provided coverage, particularly among smaller firms.
- Since most firms in the country are small, variation in the overall offer rate is driven largely by changes in the percentages of the smallest firms (3-9 workers) offering health benefits. For more information on the distribution of firms in the country, see the Survey Design and Methods Section and Figure M.4.14
- Ninety-six percent of firms with 100 or more workers offer health benefits to at least some of their workers in 2017. Ninety percent of firms with 50-99 workers offer benefits to at least some workers [Figure 2.4].
- Eighty-nine percent of all workers are employed by a firm that offers health benefits to at least some of its workers [Figure 2.26].
- Offer rates vary across different types of firms.
- Smaller firms are less likely to offer health insurance: 40% of firms with 3-9 workers offer coverage, compared to 78% of firms with 25-49 workers, and 92% of firms with 50-199 workers [Figure 2.3].
- Offer rates throughout different firm size categories in 2017 remain similar to those reported in 2016 [Figure 2.2].
Figure 2.1: Percentage of Firms Offering Health Benefits, 1999-2017
Figure 2.2: Percentage of Firms Offering Health Benefits, by Firm Size, 1999-2017
Figure 2.3: Percentage of Firms Offering Health Benefits, by Firm Size, Region, and Industry, 2017
Figure 2.4: Percentage of Firms Offering Health Benefits to at Least Some of Their Workers, by Firm Size, 2017
Figure 2.5: Percentage of Firms Offering Health Benefits, by Firm Size, 1999-2017
PART-TIME AND TEMPORARY WORKERS
- Among firms offering health benefits, relatively few offer benefits to their part-time and temporary workers.
- The ACA defines full-time workers as those who on average work at least 30 hours per week, and part-time workers as those who on average work fewer than 30 hours per week. The employer shared responsibility provision of the ACA requires that firms with at least 50 full-time equivalent employees offer full-time employees coverage that meets minimum standards or be assessed a penalty.15 Beginning in 2015, we modified the survey to explicitly ask employers whether they offered benefits to employees working fewer than 30 hours. Our previous question did not include a definition of “part-time”. For this reason, historical data on part-time offer rates are shown, but we did not test whether the differences between 2014 and 2015 were significant. Many employers may work with multiple definitions of part-time; one for their compliance with legal requirements and another for internal policies and programs.
- In 2017, 13% of all firms that offer health benefits offer them to part-time workers [Figure 2.7]. Large firms are more likely to offer health benefits to part-time workers than small firms (31% vs. 12%) [Figure 2.9].
- A small percentage (5%) of firms offering health benefits offer them to temporary workers [Figure 2.8]. Among firms offering health benefits, large firms are more likely than small firms to offer benefits to temporary workers (13% vs. 5%) [Figure 2.10]. The percentage of large firms offering health benefits to temporary workers is not statistically different from the 17% reported in 2016 [Figure 2.8].
Figure 2.6: Among Firms Offering Health Benefits, Percentage That Offer Health Benefits to Part-Time Workers, by Firm Size, 1999-2017
Figure 2.7: Among Firms Offering Health Benefits, Percentage That Offer to Part-Time Workers, by Firm Size, 2017
Figure 2.8: Among Firms Offering Health Benefits, Percentage That Offer to Temporary Workers, by Firm Size, 1999-2017
Figure 2.9: Among Firms Offering Health Benefits, Percentage That Offer to Part-Time Workers, by Firm Size, 1999-2017
Figure 2.10: Among Firms Offering Health Benefits, Percentage That Offer to Temporary Workers, by Firm Size, 1999-2017
SPOUSES, DEPENDENTS AND DOMESTIC PARTNER BENEFITS
- The majority of firms offering health benefits offer to spouses and dependents, such as children. In 2017, 94% of small firms and 100% of large firms offering health benefits offer coverage to spouses, similar to last year. Ninety-two percent of small firms and 100% of large firms offering health benefits cover other dependents, such as children, similar to last year. Five percent of small firms offering health benefits offer only single coverage to employees [Figure 2.11].
- Employers were also asked whether same-sex or opposite-sex domestic partners were allowed to enroll in the firm’s coverage. While definitions may vary, employers often define domestic partners as an unmarried couple who has lived together for a specified period of time. Firms may define domestic partners separately from any legal requirements a state may have, and also, employers may have a different policy in different parts of the country or for different workers.
- In 2017, 36% of firms offering health benefits offer coverage to opposite-sex domestic partners, similar to the 27% who did so in 2016. Forty percent of firms offering health benefits offer coverage to same-sex domestic partners, similar to the 32% who did so last year [Figure 2.13].
- When firms are asked if they offer health benefits to opposite or same-sex domestic partners, many report that they have not encountered this issue. At some small firms, the firm may not have formal human resource policies on domestic partners simply because none of the firm’s workers have asked to cover a domestic partner. Regarding health benefits for opposite-sex domestic partners, 30% of firms report in 2017 that they have not encountered this request or that the question was not applicable [Figure 2.12]. The vast majority of firms in the United States are small businesses [Figure M.1]. Therefore, statistics about the percentage of firms that offer domestic partner benefits are largely determined by small businesses. More small firms (31%) than large firms (2%) indicate that they have not encountered this request or that the question was not applicable [Figure 2.12]. Regarding health benefits for same-sex domestic partners, 34% of firms report that they have not encountered the request or that the question was not applicable. More small firms (35%) than large firms (4%) report that they have not encountered the issue of offering benefits to same-sex domestic partners [Figure 2.12].
- Among large firms not offering health benefits to same-sex domestic partners, 3% stopped offering them within the last 12 months.
- Over half (57%) of firms that offer health benefits to spouses also offer coverage to same-sex spouses, with large firms more likely than small firms to offer coverage to same-sex spouses (88% vs. 56%). Small firms are more likely than large firms to report that this request has not been encountered (32% vs. 4%) [Figure 2.15].
- Among all firms that offer health benefits, 15% report providing additional compensation or benefits to employees if they enroll in a spouse’s plan, and 18% provide additional compensation or benefits to employees if they do not participate in the firm’s health benefits [Figure 2.16].
Figure 2.11: Among Firms Offering Benefits, Percentage That Offer to Spouses, Dependents and Partners, 2017
Figure 2.12: Among Firms Offering Health Benefits, Percentage That Offer to Unmarried Same-Sex and Opposite-Sex Domestic Partners, by Firm Size and Region, 2017
Figure 2.13: Among Firms Offering Health Benefits, Percentage That Offer to Unmarried Opposite-Sex and Same-Sex Domestic Partners, by Firm Size, 2008-2017
Figure 2.14: Among Firms Not Offering Domestic Partner Benefits, Percentage of Firms That Stopped Offering Those Benefits In the Last 12 Months, by Firm Size, 2017
Figure 2.15: Among Firms Offering Health Benefits to Spouses, Percentage of Firms That Offer Coverage to Same-Sex Spouses, by Firm Size, 2017
Figure 2.16: Among Firms Offering Health Benefits, Percentage That Provide Additional Incentives to Workers for Various Enrollment Decisions, by Firm Size, 2017
SUPPLEMENTAL AND VOLUNTARY BENEFITS
- Firms offering health benefits also offer a variety of supplemental and other health benefits to their workers. Large firms are more likely than small firms to offer these benefits [Figure 2.17]. Among firms offering health benefits:
- Sixty-seven percent of small firms and 97% of large firms offer dental benefits to their employees. Of firms offering these benefits, 67% make a contribution toward the cost of the coverage [Figure 2.18].
- Forty-seven percent of small firms and 82% of large firms offer vision benefits to their employees. Of firms offering these benefits, 54% make a contribution toward the cost of the coverage [Figure 2.18].
- Critical illness insurance provides a cash benefit when an enrollee is diagnosed with a specified condition, such as cancer. Twenty-three percent of small firms and 46% of large firms offer critical illness insurance to their employees. Of firms offering these benefits, 3% make a contribution toward the cost of the coverage [Figure 2.18].
- Hospital indemnity plans, sometimes known as hospital cash plans, provide a cash benefit when an enrollee is admitted to the hospital or has a certain type of outpatient surgery. Sixteen percent of small firms and 28% of large firms offer hospital indemnity insurance to their employees. Of firms offering these benefits, 5% make a contribution toward the cost of the coverage [Figure 2.18].
- Long-term care insurance covers assistance with daily living not generally covered by health insurance such as care from a home health worker or nursing home. Sixteen percent of small firms and 25% of large firms offer long-term care insurance to their employees, similar to the percentages in 2011. Of firms offering these benefits, 47% make a contribution toward the cost of the coverage [Figure 2.18].
Figure 2.17: Among Firms Offering Health Benefits, Percentage of Firms That Offer Voluntary Benefits In Addition to the Health Plan, by Firm Size, Region and Industry, 2017
Figure 2.18: Among Firms Offering Health Benefits, Percentage That Offer Voluntary Benefits In Addition to Benefits Offered Through the Health Plan, by Firm Size, 2017
Figure 2.19: Among Firms Offering Health Benefits, Percentage That Offer Supplemental Insurance Benefits In Addition to Benefits Offered Through the Health Plan, by Firm Size, 2017
Figure 2.20: Among Firms Offering Health Benefits, Percentage of Firms That Offer or Contribute to a Separate Benefit Plan Providing Dental or Vision Benefits, by Firm Size, 2000-2017
Figure 2.21: Among Firms Offering Health Benefits, Percentage That Offer Long Term Care Insurance In Addition to Benefits Offered Through the Health Plan, by Firm Size, 2007, 2011, and 2017
FIRMS NOT OFFERING HEALTH BENEFITS
- The survey asks firms that do not offer health benefits if they have offered insurance or shopped for insurance in the recent past, and about their most important reasons for not offering coverage. Because such a small percentage of large firms report not offering health benefits, we present responses for small non-offering firms only.
- The cost of health insurance remains the primary reason cited by firms for not offering health benefits. Among small firms not offering health benefits, 44% cite high cost as “the most important reason” for not doing so, followed by “the firm is too small” (17%) [Figure 2.22]. Relatively few small firms indicate that they do not offer because they believe that employees will get a better deal on the health insurance exchanges (2%).
- Many small non-offering firms have either offered health insurance in the past five years, or have shopped for health insurance in the past year. Twenty percent of small non-offering firms have offered health benefits in the past five years, and 13% have shopped for coverage in the past year [Figure 2.23]. The 20% of small non-offering firms that have offered coverage in the past five years is similar to the 19% reported last year.
- Among small non-offering firms that report they stopped offering coverage within the last five years, 18% stopped offering coverage within the last year.
- Among small non-offering firms, 16% report that they provide funds to their employees to purchase health insurance on their own in the individual market or through a health insurance exchange [Figure 2.24]. Forty percent of these firms provide workers between $2,000 and $5,999 a year to purchase non-group insurance [Figure 2.25].
Figure 2.22: Among Small Firms Not Offering Health Benefits, Most Important Reason for Not Offering, 2017
Figure 2.23: Among Small Firms Not Offering Health Benefits, Percentage That Report the Following Actions, 2009-2017
Figure 2.24: Among Small Firms Not Offering Health Benefits, Percentage That Provide Workers Funds to Purchase Non-Group Insurance, by Firm Size, 2012-2017
Figure 2.25: Among Small Firms That Provide Workers Funds to Purchase Non-Group Insurance, Annual Amounts That Firms Provide to Workers, 2017
Figure 2.26: Percentage of All Workers at Firms That Offer Health Benefits to at Least Some Workers, by Firm Size, 1999-2017
- Kaiser Family Foundation. Diminishing offer and coverage rates among private sector employees [Internet]. Menlo Park, (CA): KFF; 2016 Sep [cited 2017 Jul 13]. Available from: http://www.kff.org/private-insurance/issue-brief/diminishing-offer-and-coverage-rates-among-private-sector-employees/↩
- Because surveys only collect information from a portion of the total number of firms in the country, there is uncertainty in any estimate. Since there are so many small firms, sometimes even seemingly large differences are not statistically different. For more information on the Employer Health Benefits Survey’s weighting and design please see the Survey Design and Methods section.↩
- Internal Revenue Code. 26 U.S. Code § 4980H – Shared responsibility for employers regarding health coverage. 2011. https://www.gpo.gov/fdsys/pkg/USCODE-2011-title26/pdf/USCODE-2011-title26-subtitleD-chap43-sec4980H.pdf↩