Problems With Health Insurance in the Workplace

It's hard to underestimate the importance of health insurance coverage to the workforce. Health insurance benefits are often the deciding factor when choosing between jobs, weighing retirement options and considering leaving a job to pursue self-employment. Yet health insurance is losing ground as a standard offering for many employers, and even those whose jobs do offer health insurance may find it difficult or impossible to obtain.

Small Businesses

• The rising cost of health care and health insurance has affected employers' ability to offer affordable health insurance coverage to their employees. This is particularly true of small businesses, which may not offer health insurance at all due to a combination of factors. These factors include cost, high turnover and the fact that many employees decline to take the coverage, which is likely due to low wages.

  The Agency for Healthcare Research and Quality has found that "small employers with predominantly low-wage workers are much less likely to offer health insurance," adding that "small employers not offering health insurance typically cite the cost of insurance and the belief that employees have other sources of coverage (e.g., through a spouse) as their principal reasons."

Large Companies

• Health insurance is not guaranteed for those who work for larger companies, either. The rising costs of providing health insurance has resulted in many larger companies passing those costs on to their employees, making health insurance difficult to afford or completely unaffordable.

  The Agency for Healthcare Research and Quality found that enrollment in employer-sponsored health insurance has dropped in recent years, and draws the conclusion that higher costs to the employee may be the deciding factor. Additionally, the Kaiser Family Foundation reports that worker contribution toward health insurance coverage offered through an employer between 2000 and 2010 increased almost 150 percent. In order to offset the rising cost of coverage for their employees, many companies are offering plans that cost more but offer less coverage in the form of higher co-pays and deductibles or fewer benefits.

Lack of Coverage

• One problem with health insurance in the workplace that is endemic to both small and large organizations is insurance coverage that is not extended to all employees. Even when health insurance is offered, some workers can still be excluded. "Some workers are not eligible to enroll as a result of waiting periods or minimum work-hour rules," reports the Kaiser Family Foundation. Workplaces that employ a large number of part-time workers may thus have many employees who are not extended insurance coverage. Additionally, workplaces that require new hire probationary periods will also have full-time employees who are without coverage until the period is over.