As more employers offer healthplans, they will also continue to look for ways to control healthcare costs. (Photo: Shutterstock)

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Low unemployment rates due to the strengtheningeconomy is resulting in more employers offering health coverage, according to a report by theEmployee Benefit Research Institute.

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In 2017, the overall percentage of private-sector employersoffering health benefits increased for the first time between 2008and 2017. In 2008, 56.4 percent of private-sector employers offeredhealth benefits, but by 2016, it was down to45.3 percent. However, the overall percentage increased again to46.9 percent in 2017.

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Related: How small businesses are keeping pace on healthbenefits, costs

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“While the overall offer rate trended down until 2017, thepercentage of workers eligible for health coverage has beenincreasing since 2015,” the authors write. “Furthermore, the 76.8percent of workers eligible for health coverage in 2017 was muchhigher than the percentage of employers offering such coverage. Thejuxtaposition between the two trends suggests that workers havebeen migrating to jobs that offer health coverage.”

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Large employers for the most part have stayed the course bycontinuing to offer health coverage to their workers, according tothe report. Nearly all large employers offered health coveragebefore enactment of the Affordable Care Act and continued to do sothrough 2017. Over this period, the percentage of employers with1,000 or more employees that offered coverage was consistently nearor above 99 percent and was 99.3 percent in 2017.

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In contrast to large employers, small and mid-sized companiesdid not stay the course — the percentage of small and mid-sizedemployers offering health benefits started falling as far back as2009. However “there appears to be the beginning of a rebound” inofferings among these employers starting between 2015 and 2017,according to the report.

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Broken down by employer size:

  • For employers with fewer than 10 employees, those offeringhealth benefits declined from 22.7 percent in 2015 to 21.7 percentin 2016, then increased to 23.5 percent in 2017.
  • For employers with 10 to 24 employees, those offering healthbenefits increased from 48.9 percent in 2015 to 49.4 percent in2016.
  • For employers with 25 to 99 employees, those offering healthbenefits increased from 73.5 percent in 2015 to 74.6 percent in2016.
  • For employers with 100 to 999 employees, the percentageoffering health benefits increased from 92.5 percent in 2014 to95.1 percent in 2015.

In 2017, circumstances appear to have changed again for somesmall employers, making it more advantageous to offer healthcoverage, due in large part to the low unemployment rate andrelatively low and less volatile premium increases, according tothe report.

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“When unemployment is low, recruiting and retaining workersbecomes a bigger challenge for employers, including some smalleremployers, which in turn often means improving compensation andbenefits,” the authors write.

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As more employers offer health plans, they will “naturally”continue to look for ways to control health care costs, accordingto HRDive. “Some large corporations, likeIntel, Cisco Systems, Walmart and Boeing, are taking a bold step bybypassing insurance companies and negotiating prices directly withhealth care providers,” they write.

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Other cost-cutting strategies include offering second-opinionservices, focusing on health care outcomes and preventive care andfinding ways to change the payment and delivery of health careservices through performance networks​, accountable careorganizations and centers of excellence.

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Katie Kuehner-Hebert

Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.