Low-Income Workers with Employer-Sponsored Insurance: Who’s at Risk When Employer Coverage Is No Longer an Option?

Abstract

A firm’s decision to drop the offer of employer-sponsored insurance (ESI), reduce eligibility for ESI, or significantly increase employee costs would have serious implications for the health insurance status of currently covered low-income workers. The authors find that at least a third of currently covered low-income workers do not have affordable insurance options outside of the group market. Furthermore, a simulation analysis shows that 54 percent of those workers would become uninsured if their employers were to drop ESI. This would result in an additional 1 million uninsured adults if 10 percent of low-income workers lost their ESI offer, and at least 350,000 uninsured adults if 10 percent of workers in firms with fewer than 100 employees (the firms most likely to drop coverage) lost their ESI. The authors also find that expanding public programs to cover low-income workers would reduce the high uninsurance rate by half, but substantial minorities would remain uninsured.