Analysis released Thursday from the Employee Benefit Research Instituteindicates employers could stop offeringhealth insurance if they believe employees no longervalue the benefit.

EBRI bases this prediction on whether the tax treatment foremployment-based health insurance is eliminated orsignificantly cut back as part of the federal debt-reductioneffort, a change that was proposed in December 2010.

President Obama's bipartisan National Commission on FiscalResponsibility and Reform called for reducing the preferentialtax treatment of employment-based health benefits as it applies toworkers, first by capping, then freezing, phasing down, andultimately eliminating them.

If this change were to take place, accordingto EBRI, workers would face an increase in taxes on abenefit that currently isn't taxed, and they may begin toquestion the value of keeping their workplace coverage. Lowestincome workers, especially, would find state-run health insurance exchanges (which are set to be operational in2014) more advantageous than employment-based health benefits.

And, EBRI explains, if enough workers don't prefer theiremployer's health benefits, the likelihood grows that manyemployers will stop offering health benefits at all.

“Even if only a fraction workers preferred an insurance exchangeover employment-based coverage, it would send a clear message toemployers that millions of workers will no longer value thebenefit,” says Paul Fronstin, director of EBRI’s Health Researchand Education Program.

The tax preference associated with employment-based healthcoverage is the largest tax expenditure in the U.S. budget,according to EBRI. It accounts for $1.1 trillion in foregonetax revenue between 2012 and 2016.

The commission's proposed changes would achieve $4 trillion indeficit reduction by 2020.

Employment-based health coverage is the most common source ofhealth coverage in the United States, according to EBRI. In 2009,59 percent of nonelderly individuals were covered by anemployment-based health benefits plan, with 68.2 percent of workerscovered, 34.6 percent of nonworking adults covered and 55.8 percentof children covered.