The Value of Employer-Sponsored Health Coverage

With a surplus of job opportunities, many workers today focus on taking roles with employer-sponsored health insurance. According to polls, 80% of workers were more inclined to take a job with benefits than a job without benefits that included 30% more salary. The employer-sponsored insured system (ESI) is the backbone of the American healthcare system, covering over 150 million Americans, almost half of the U.S. population.

The U.S. Chamber of Commerce recently hosted an event focusing on its PACT campaign and how employees, providers, communities, and businesses all benefit from ESI. Here are three takeaways on the value of ESI.

ESI Is a Win-Win for Both Employees and Employers

In 2020, the U.S. Chamber of Commerce launched Protecting America’s Coverage Together (PACT), a campaign warning against Medicare buy-in or public options as well as reviewing the role of ESI in businesses. To assess if ESIs are a worthy investment for businesses, PACT commissioned Avalere Health to estimate the return on investment (ROI) for businesses with more than 100 employees that provide ESI.

“The private sector provides a higher quality of coverage than a government plan, with the average employer paying more than 70% to 80% of the cost of coverage,” said Katie Mahoney, the Vice President of Health Policy for the U.S. Chamber of Commerce.

“On average, employers saw a 47% return on investment for their ESI program in 2022,” she continued. “That means for every dollar they spend on ESI, they get $1.47 back.”

Mahoney also mentioned that within a five-year window, that number is expected to go up to 52% by 2026.

Benefits Offer a Wide Range of Affordable Coverage

Nearly 156 million Americans obtain their health care coverage from their employer, proving many employers are committed to providing affordable, comprehensive benefits to their employees. To demonstrate how these benefits are helping employees and employers, Corey Astill, Vice President of Health and Retirement Policy of The Business Roundtable, shared some statistics about ESIs.

“Coverage is affordable,” said Astill. “On average, employers cover 83% of premium costs for single coverage and 73% of premium costs for family coverage. In addition, private for-profit firms have lower annual premiums for family coverage than do public employers.”

Astill mentioned how insurance coverage is stable for employees, saving money for both them and their employers over time.

“The average percentage paid for premiums by employees has remained consistent over the years at around 17% per single coverage and 28% for family coverage,” Astill said.

Some may assume buying into an ESI means employees are locked into a single type of plan. However, employees have a choice of the health care package they’d like to enroll in.

“Employees have choices,” Astill explained. “74% of covered workers in large firms are employed by a firm that offers more than one type of plan. Plan choices range from a broad network plan with a high monthly premium and a low deductible to a narrow network plan with a low monthly premium and a high deductible.”

The Private Sector Contributes to Health Care Innovation

Robyn Boerstling, Vice President of Infrastructure, Innovation & Human Resources Policy at The National Association of Manufacturers, mentioned that the health care industry needs to draw upon the experience of the private sector to spur innovation and improve ESI programs. A welcome business environment needs to be maintained to improve innovation.

“The innovation ecosystem found in the United States is unique and part of what makes our nation a world leader in research and development,” said Boerstling.

“Our medical innovations, pharmaceuticals, and medical devices, in particular, are possible because of the policy and business environment that enables unparalleled investments,” she continued. “Research and manufacturing here in the U.S. advances in medical innovation require a major upfront private sector, far beyond what any government alone can provide.”