Employer-sponsored health insurance (ESI) represents the single largest source of health coverage in the U.S., providing health benefits to more than 160 million Americans. Through decades of policy and political change, and even a pandemic, ESI has remained the backbone of American health care; employers have not wavered in their belief that it is the best system to ensure a healthy workforce and keep costs down.
Following the passage of the Affordable Care Act (ACA), some experts predicted that employers would redirect workers to ACA exchanges, rather than offer ESI. Voices on the right and the left have advocated for approaches to fundamentally change how we deliver coverage. Instead, employers continue to make ESI a priority. Indeed, a survey from earlier this year found that employers are committed to investing in their ESI benefits, even with other options available.
In January, the Employee Research Benefit Institute (EBRI) published a study underscoring the value of ESI to businesses and their employees. Despite recent policy changes to increase subsidies for the ACA exchanges, coupled with health care price inflation, EBRI’s findings were clear: employers do not expect significant changes to the future of their ESI offerings.
This study also explored the many reasons they did not shift employee enrollment to the exchanges. These include employers believing they could offer a better deal than what their employees could find on the public health insurance exchange or “marketplace”, having the trust of their employees to parse their insurance choices, and viewing ESI as a key recruitment and retention tool.
These findings align with a recent Protecting America’s Coverage Together (PACT)-commissioned poll from Seven Letter Insight that shows 83% of Americans believe the health insurance plan they get from their employer is more affordable than a plan they could find on open insurance markets. Further, 93% of respondents are satisfied with their current ESI plans. Ninety-eight percent agreed that “a good company to work for provides quality health coverage to their employees.”
Similarly, EBRI found that the open market could leave some employees confused or even overwhelmed with the number of insurance plans to choose from. The PACT poll maintained this sentiment, finding that 95% of Americans believe their ESI plan is more convenient than an open market plan.
Finally, talent acquisition and retention are extremely important for all businesses. One consistent finding from employers across multiple industries is that ESI plays a significant role in attracting and keeping today’s top talent. EBRI found that cutting ESI benefits would hamper employers’ efforts to cultivate a strong workforce. The PACT poll also found that workers ranked ESI higher than retirement savings plans and paid time off as benefits most important to them.
It's clear that ESI is the preferred choice for employers and employees, and businesses remain committed to ESI and prioritizing the health of their workforce. It’s unlikely that changes to public policy would sway employers to abandon their ESI offerings. From affordability and convenience to recruitment and retention, both employers and employees see value in ESI. The prevalence of ESI and the importance it has in the eyes of businesses and American workers highlights the need to protect and strengthen the system in the years to come.
