Employers Provide Health Insurance Benefits for Practical, Not Ethical, Reasons Study Finds

In 2001–02, the Employee Benefit Research Institute conducted a study of employer attitudes and practices concerning employer-sponsored health benefits and the uninsured.

The Employee Benefit Research Institute is a Washington-based organization that conducts research and education on economic security and employee benefits issues. Institute staff conducted a literature review, a Web-based survey that drew responses from 815 employers and four half-day focus group meetings with 48 employer representatives.

Key Findings

Major findings, published in an issue brief, Employer Attitudes and Practices Affecting Health Benefits and the Uninsured, included:

  • Employers provide health benefits primarily to attract and retain the best workers possible and thereby maximize productivity.
  • Many large employers still try to cover all or most of their full-time workers, but double-digit cost increases in recent years have prompted many to make changes.
  • The fact that firms offer coverage as part of their competition for labor cuts both ways in its impact on aggregate health coverage levels.
  • Some employers realize that passing along greater costs to workers may cause low-wage workers to forgo coverage.
  • Employers typically do not think about the issue of providing coverage for more of the uninsured.
  • Because employers themselves do not perceive covering the uninsured as a priority, business organizations representing them also do not focus on this issue.