Employers still support insurance benefits

Many say it has multiple benefits

Despite the crushing impact of steadily rising health coverage costs, the majority of employers still believe in and are willing to help underwrite health insurance for employees, according to a new study released by The Commonwealth Fund, a New York City-based private foundation that supports research in health-related fields.

Of 453 employers surveyed for the study, 59% said it was "very important" that employers provide health coverage to their employees or contribute to the cost. Roughly 93% said they would provide information to employees about how to apply for Medicaid or the Children’s Health Insurance Program (CHIP), while 26% said they would be "very interested" in a program in which their employees would be able to buy coverage through a state or federal employee benefit plan with employers paying part of the cost.

More than half of the employers surveyed (67%) said offering health benefits improves employee health, while 39% said it increases employee productivity.

"What really comes through in this survey is that even though costs are going up and employers often have to shift more of the cost to employees, you really get a strong sense that they believe in health insurance," says Sara R. Collins, PhD, senior program officer for The Commonwealth Fund and lead author of the study, "Job-Based Health Insurance in the Balance: Employer Views of Coverage in the Workplace." (The complete report is available at www.cmwf.org.)

"As a whole, employers believe health insurance improves health and morale, satisfaction with jobs, and many even believe it is linked to productivity," she continues. "You get the sense they are not cutting and running for the exits, even though costs are rising."

A broad spectrum

In the sample of 453 employers who were surveyed between October 2002 and May 2003, many different types of companies were included, Collins explains. "They were evenly split between large and small [fewer than 100 employees] companies," she notes. "Four in five currently offer coverage. These employers view health insurance as a core part of their benefits package."

One of the more powerful challenges they face, she notes, is the pressure of rising costs. "With increasing premiums, they have had to increase cost sharing and create higher deductibles and copays," she says.

"They strongly feel the need for options other than cost-shifting," she notes. Many favored a wide range of policy options to expand coverage and to make it more affordable. They include:

• Tax credits: Nearly all recent health insurance expansion proposals have sought to make coverage affordable by providing premium assistance in the form of tax credits for workers and families.

• Consolidated Omnibus Budget Reconcilia-tion Act (COBRA): Another option would be to allow unemployed workers to use tax credits to offset the costs of COBRA.

• Increasing enrollment in Medicaid and CHIP: Millions of adults and children who are currently eligible for insurance coverage under Medicaid and CHIP are not enrolled in these programs.

• Employer requirements to offer or contribute to employee health insurance: Surprisingly, perhaps, a majority of employers believe that corporations should be responsible for sharing the costs of their employees’ health benefits.

• New group alternatives to employer coverage: This includes programs in which employees and dependents would be able to buy coverage through a federal or state employee benefit plan, with part of the premium paid by the employer.

• Expanding coverage to dependent young adults: Currently, such coverage usually ends when the child reaches 19.

"There’s quite strong support for a variety of these policy options," notes Collins.

Health link undeniable

Proponents of continuance of the health insurance benefit also can point to strong evidence that such coverage contributes to better employee health. "Certainly, the research is there that health insurance has an effect on health and that people do not get good health care if they do not have adequate insurance," says Collins.

She points to a Commonwealth Fund health insurance survey published in 2001 ("Security Matters"), that asked participants if they had ever been uninsured during the previous year. "About half of the participants who had any time uninsured said they had not filled prescriptions, did not see a specialist when they needed to, or skipped a test or a follow-up visit when they were sick, so it really does make a difference," says Collins, who adds that the survey also is available on the Commonwealth web site, and that a new one was to be released in April.

A supermarket chain based in Portland, ME, Hannaford Bros. Co., is strongly on board with the linkage between health insurance coverage and employee well-being. "Health insurance coverage is still a way to become a preferred employer, but from our experience and those I work with in the state, we feel that the quality of care issue is more significant," said Peter Hayes, manager of employee benefits for Hannaford Bros.

Hayes made his remarks during a teleconference on March 9 that discussed the ramifications of the Commonwealth survey.

"We are starting to use ways of looking at the outcomes information for chronic diseases," noted Hayes, who said that Hannaford operates more than 120 supermarkets.

"For example, only 40% of our diabetics are getting the right care. And parents lose 50% less time from the workplace if their kids get the right treatment."

In other words, Hayes emphasized, providing insurance is only a first step. "Getting insured is important, but getting the right care, in the right place, at the right time, must be assured," he noted. "And employers see themselves as being one of the few groups that can move the marketplace to do this."

And that’s the real good news coming out of the Commonwealth survey: Employers are in this for the long haul. "Employers will stay in the game because they recognize the void in the market, and they want to make this happen," Hayes concluded.

[For more information, contact:

Sara R. Collins, PhD, Senior Program Officer, The Commonwealth Fund. Telephone: (212) 606-3838. Fax: (212) 606-3500. E-mail: src@cmwf.org.]