Teaching Profession Opinion

Employer Sponsored Insurance Dramatically Changing

By Emily Douglas-McNab — June 15, 2013 1 min read
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While flipping through the latest HR Magazine, an infographic caught my eye. It related to a conversation I was having only yesterday on rising health insurance costs and the decline in the number of organizations offering employer sponsored insurance (known in the industry as ESI).

According to a recently released report by the Robert Wood Johnson Foundation (RWJF) and prepared by researchers from the University of Minnesota’s State Health Access Data Assistance Center, health insurance costs, organizations’ offerings, and employee participation have dramatically changed over the past 10 or so years.

Image courtesy of freedigitalphotos.net user Stuart Miles

In an interview about the report, Risa Lavizzo-Mourey, M.D.--CEO; and President of the RWJF--noted that, “Employers continue to shoulder about the same percentage of costs for employees’ health insurance as they did 10 years ago, but everyone’s costs have increased dramatically. Higher costs naturally translate into fewer employers offering insurance coverage, and fewer employees accepting it, even when it is offered.”

Specifically, the report notes interesting information collected between 1999/2000 and 2010/2011. Here are four important facts that you may find interesting:

1. ESI Offering: The percentage of what the report refers to as "nonelderly" individuals in the United States with ESI has declined from 69.7 percent, or 170.5 million people (in 1999/2000), to 59.5 percent, or 159 million people (in 2010/2011). Individuals gaining public coverage accounts for a portion of the 10.2 percent decrease. Meanwhile, the uninsured rate increased from 14.7 percent to 17.8 percent (report pg 4).
2. ESI Take-up: The take-up rate also fell nationwide from 81.8 percent to 76.3 percent (pg 7/8). (Definition- take-up rate: an "estimate of the percentage of workers with access to a plan who participate in the plan.")
3. Movement to Self-insured: The data also show that there are more organizations moving towards self-insurance, from 28.1 percent to 36.4 percent in 2010/2011. Specifically, the report notes and provides data to show that large employers are moving towards self-insurance over small organizations (pg 10).
4. Costs: Between 1999/2000 and 2010/2011, the average insurance premium more than doubled for single coverage, from $2,490 to $5,081. Family coverage rose more than 125 percent from $6,415 to $14,447! This has resulted in an increase of employee contribution for single from $435 to $1,056 and family from $1,526 to $3,842 (pg 11).

While some individuals reading this post may find this interesting, I know others may be saying, “So what?” While these data may not specifically pertain to schools, it’s important as a talent manager to keep a pulse on some of the large-ticket and high-anxiety items we are expected to manage (directly or indirectly).

Have your organization’s insurance costs, take-up rates, and/or employee contributions changed over the past ten years? Are they as dramatic as those noted in this report?

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