The share of employers who offer insurance to their employees remained stable in California between 2013 and 2015. But the share of eligible employees who chose to enroll dropped from 86.4% to 80.2%.
Most Californians under age 65 with health insurance receive it through an employer, but since 2009 the availability of employer-sponsored insurance (ESI) in the state has been on the decline. A key question around the Affordable Care Act (ACA) was whether the reforms would further erode ESI coverage.
Recent results from the 2015 California Employer Health Benefits Survey show that the availability of ESI remained stable in the state following implementation of the law. There was no significant change in the share of firms that offered coverage between 2013 and 2015, and the share of employees who work at firms that offer coverage also remained stable. (The declines in both measures between 2013 and 2015 in the graphs below are not statistically significant.)
Worker Eligibility for ESI Remained Stable Overall, Increased Among Some Groups
Another issue of potential concern with ACA was whether firms would reduce employees' eligibility for ESI by taking such steps as shifting full-time workers to part-time. This does not appear to be the case in California, where the share of eligible workers at firms that offer coverage remained stable at about 79% between 2013 and 2015. At firms with a larger share of low-wage employees (more than 35% of workers earning less than $23,000 per year), the proportion of workers who were eligible for coverage actually increased significantly from 62.3% to 76.7% between 2013 and 2015 (yellow line below).
Fewer Eligible Workers Enroll in ESI
The share of eligible workers who actually enrolled in ESI coverage did decline between 2013 and 2015 in California. Also known as the "take-up" rate, this figure declined from 86.4% in 2013 to 80.2% in 2015, a statistically significant change. This decline brings California closer to the national average take-up rate of 79%, which was statistically unchanged between 2013 and 2015.
Availability of ESI for Workers' Family Members Remained Stable, While Enrollment Dropped Among Low-Income Family Members
Many individuals obtain ESI as a spouse or dependent of another worker, so it is helpful to track trends in the availability and take-up of ESI at the family level. Between 2013 and 2014 (the latest year for which data are available) the share of families in California with any offer of ESI was statistically unchanged, as was the share of families with any ESI offer who enrolled all eligible family members. However, there was a significant decline in enrollment in ESI among low-income families. The share of families with incomes below 138% of the federal poverty level who were offered ESI and enrolled all eligible family members declined by nearly 13 percentage points from 49.4% to 36.7% (yellow line below).
The reduction in the share of employees and low-income family members deciding to enroll in ESI when eligible could be driven by multiple factors, including cost and the availability of alternative coverage options, such as Medi-Cal and subsidized coverage through Covered California.