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A recent study by the Employee Benefits Research Institute (EBRI) found continuing enthusiasm among employers concerning sponsorship of worker health insurance. According to the EBRI, contrary to predictions envisioning an offload of health benefits, employers do not want to give up control. They view themselves as “paternalistic” and health benefits as advantageous for recruitment and retention.
 
Key finding in the “What Employers Say About the Future of Employer-Sponsored Health Insurance” study include:
-ACA Impact Not as Predicted: The Affordable Care Act (ACA) was expected to dramatically shift how Americans get their health benefits; however, the number of individuals getting insurance through work has not wavered significantly in the decade since the ACA was passed. According to The Millbank Quarterly and National Library of Medicine, employment-based health insurance plans cover two-thirds of nonelderly Americans. In 2022, the Kaiser Family Foundation survey of employer health benefits found 155 million Americans rely on employer-sponsored health insurance.
-ICHRAs Not Drawing a Lot of Interest: Individual Coverage Health Reimbursement Accounts (ICHRAs) expanded coverage options in 2019 but have failed to drive increased Exchange sales. While ICHRAs allow individuals to use pre-tax dollars from an account funded by their employers, they have not attracted much employer or employee interest. EBRI says few interviewees were very familiar with ICHRAs.
-Escalating Costs Cause Continued Frustration: Rising health insurance costs continue to irritate employers but few of those interviewed see cost increases as unsustainable. “The ACA, private exchanges, ICHRA plans, and the rising costs of providing health benefits were all threats that analysts and pundits alike had predicted would erode the relationship between employment and health benefits,” said Paul Fronstin, director, Health Benefits Research at EBRI.
 
“Future policy and economic developments may pose yet another threat to the bond between employment and health benefits. This includes the permanent extension of ACA subsidies, implementation of a public option, and continued health care cost increases that outpace inflation,” Fronstin noted. “Yet, the will for employers to provide health benefits to their workers remains strong. It seems unlikely that these forces would cause companies to abandon employer-sponsored insurance.”
 
The EBRI study was based on interviews with more than two dozen human resources executives, with job titles such as director of benefits or vice president of employee benefits. Each interviewee had at least a moderate amount of decision-making power in building their firm’s benefits package. The smallest firm represented in the study employed 300 employees. The largest employed more than 250,000 workers. A wide range of industries was represented, including insurance, technology, consumer goods manufacturing, utilities, biotechnology research, financial services, and industrial manufacturing. Most firms interviewed offered at least two different types of health insurance plans, such as a preferred provider organization (PPO) and a high-deductible health plan (HDHP).
 
The EBRI is a non-profit, independent, and unbiased research organization that provides authoritative and objective information about critical issues relating to employee benefit programs in the United States. Also supporting EBRI in this study was The Commonwealth Fund, a national, private foundation committed to independent research on health care issues and providing grants to improve health care practice and policy.
 
At Word & Brown, we’ll continue to monitor employer surveys on employee benefits and the costs of coverage to firms and participants throughout 2023. Check back often for the latest information.