Few Employers Thinking Of Dropping Coverage, EBRI Says

By Susan Rupe

Employers are in crisis management mode and facing uncertainty as the COVID-19 pandemic has led to record high numbers of jobless as well as concerns over business reopening. At a time like this, it’s easy to wonder whether employers will quit offering health benefits to their workers.

But the Employee Benefit Research Institute found that few employers who currently offering health coverage are thinking about dropping it. EBRI examined the issue during a webinar “Coming Out The Other Side Of COVID-19: The Future Of The Employer-Based Health Care System” on Wednesday.

About 49% of the U.S. population is covered by employer-based health insurance, said Paul Fronstin, director of EBRI’s health research and education program.

“Ultimately, employers offer health insurance for business reasons,” he said. “To attract and retain employees, and because of concern over employee health.”

But with unemployment rates spiking to record levels in May, the question is whether employers need to offer health benefits anymore. In addition, Fronstin said, the current recession is different from previous downturns because workers don’t need their employers to provide health care since the Affordable Care Act made health insurance available to Americans who don’t receive coverage at work.

EBRI’s study showed employers believe “health care is too emotionally charged to be on the table.” Instead, employers are looking to save costs through furloughs, salary decreases and cuts to 401(k) matches.

Other highlights of the EBRI study showed:

Even with high unemployment, health benefits are viewed as an important recruitment and retention tool.
Only non-gold standard employers would consider dropping coverage.
Employers are considering dropping spousal coverage, high-deductible health plans, and high-cost specialty drugs.
Those employers who do not offer HDHPs have no plans to offer them.
Employers would consider dropping coverage of others did, but no one wants to be the first to do so.
Employers are still in crisis management mode and not thinking long-term yet.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.