Employer-Provided Health Insurance: Still a Top Benefit
In the American healthcare system, employer-sponsored coverage remains a cornerstone. Millions rely on this type of plan, and the system is widely favored by workers and businesses alike. This article examines why this coverage continues to be so valued.
Workers Express High Satisfaction
Most Americans agree on little, but satisfaction with their employer-provided coverage is one thing they share. A poll by Protecting Americans Coverage Together (PACT) found that 93% of those surveyed are satisfied with their employer-provided insurance, while over half are highly satisfied.
Affordability and Quality of Coverage
According to a PACT poll, many workers consider their workplace coverage affordable. Respondents frequently mentioned affordability when describing their coverage. Further, over three-quarters of those polled reported their workplace coverage’s quality was superior to other options.
Employers See Strong Return on Investment
Businesses offering workplace health coverage achieve a strong return on investment (ROI), as noted by a study conducted by Avalere Health. Companies with at least 100 employees see a 47% ROI. This stems from reduced direct medical expenses, better productivity, lower recruiting costs, and stronger employee retention.
Mental Health Care Enhancements
As the nation’s mental health crisis continues, quality mental health care is increasingly important. Many employers are boosting their resources to support the mental health needs of their workforce. About half of large firms have increased mental health counseling via employee assistance programs or third-party vendors.
Employers Shield Workers from Rising Costs
Businesses are working to absorb increasing healthcare costs to ensure reasonable premiums for their staff. A Mercer survey indicated that many businesses will avoid cutting healthcare benefits or increasing employee contributions despite rising costs. Instead, companies are enhancing their current programs.
Preference for Workplace Coverage
PACT’s poll showed a preference for employer-provided coverage over other types by a wide margin. Almost nine out of ten preferred employer-provided coverage. Additionally, a large majority of respondents said employer coverage would be better for them than government-provided coverage.
Coverage as a Top Benefit
A Society for Human Resources Management (SHRM) poll found that the vast majority of Americans view health insurance as a very important benefit from their employers. A PACT-commissioned poll supported this, with a similar percentage considering health insurance to be a very important benefit. Health insurance consistently ranks as the most important employee benefit.
Tax Treatment and Affordability
The current tax treatment of employer-provided healthcare has created a reliable system, allowing employers to offer affordable coverage to their employees and families. Changes to this policy could disrupt the way healthcare is delivered for almost 180 million Americans. However, the IRS recently announced an increase in the health savings account (HSA) contribution limits for 2024, offering a tax-advantaged way for individuals with high-deductible health plans to save for healthcare expenses (IRS 2024).
Workplace Coverage and Talent
Weakening the employer-provided coverage system could harm companies’ ability to attract talent, according to a report by the Employee Research Benefit Institute (EBRI). PACT’s poll reaffirms this finding, showing that most Americans would decline a job without health insurance.
ERISA’s Role
The Employee Retirement Income Security Act (ERISA) is essential for maintaining efficient and cost-effective employer-provided coverage by allowing employers to offer and maintain uniform health plans through its preemption clause. Employers’ highest priority for Congress and the Administration is to protect ERISA preemption, according to a 2024 Business Group on Health survey.
