Health
Insurance Data Briefs #4:
Access
to Employer-Provided Health Insurance as a Dependent on a Family Member’s
Plan
Of the two-in-five Americans with
employer-provided health insurance from their employer, slightly more than half
extend that coverage to at least one other family member. On average, more of
those who extend coverage—providers—cover adults than children.
Over the course of the most recent economic contraction, the share
of individuals with employer-provided health insurance providing coverage to
another family member fell. The share of those individuals dependent on another
family members’ employer-provided health insurance plan fell as well. The
declines were sharpest in the share of children covered on a parent’s
employer-provided health insurance plan: between 1999 and 2002, the share of
children who were dependents on their families employer-provided health
insurance plan fell by 6.5 percentage points, down to 69.2 percent of all
children with health insurance. There was also a sharp drop between 1999 and
2002 in the share of young adults (ages 18 to 24) receiving employer-provided
health insurance as a dependent, from 54.6 percent, down to 48.8
percent.
Within families, the divide between members who provide
insurance coverage to others and those who receive coverage from a spouse or
parent is significantly affected by gender, ethnicity/race, and age. For
example:
• With employer-provided health insurance, women are less likely than men to cover other family members;
• Latinos and African-Americans are less likely than whites to cover family members; and
• Only one in eight young workers who receive employer-provided health insurance extends coverage to others.
In contrast, dependents are more
than twice as likely to be women than men, and more likely to be a young worker
than an older adult. The racial/ethnic gap remains: whites are not only more
likely than Latinos or African Americans to be providers, but dependents as
well.
Wages, too, significantly influence the relationship between
providers and dependents within families. Providers are twice as likely to be
high-wage earners, and dependents are far more likely to be low-wage workers.
Still, in 2002 only 35.7 percent of low-wage workers with health insurance
received it from another family member. The share of low-wage workers who are
either health insurance providers or dependents decreased over the most recent
economic contraction much more so than for high-wage workers.
Access to Employer-Provided Health Insurance as a Dependent on a Family Member’s Plan
Most Americans have private
health insurance coverage, and the majority of private coverage is provided
through an employer. Less than two adults in five receive employer-provided
health insurance from their own employer. Of these, half (51.6 percent) extend
their coverage to another family member. One third of adults with health
insurance receive coverage from their spouse’s or another family
member’s employer. (See Health insurance
Data Briefs #2 and #3 for
information on health insurance coverage generally and employer-provided health
insurance for employees.)
This report uses data from the Survey of
Income and Program Participation to examine who in families is providing
coverage to other family members and who are dependents on a family
member’s employer-provided health plan. A slight majority of those with
employer-provided health insurance from their own employer also cover other
family members living in their home with this plan. Health insurance
“providers” are more likely to be men than women, to be a high wage
earner rather than low-wage, and to be in their 30s or 40s, rather than in their
20s. Those “dependent” on employer-provided health insurance from
another family member’s plan are more likely to be women than men, more
likely to be low-wage or non-working than to be high-wage, and likely to be
young adults, many of whom may be covered on their parent’s plan, rather
than spouse’s.
How individuals access the health insurance
system is important because it may affect their lives in other ways. For
example, for those workers who are providers, the fact that their family is
dependent on their employer for health insurance may make them less likely to
change jobs. Further, the entire family is vulnerable to losing health
insurance if the health insurance provider is laid-off. Being dependent on
another person’s health insurance plan also has implications for specific
groups: women, who are more likely than men to be dependents, are more
vulnerable to losing coverage in the case of divorce or death of their spouse.
Young workers, who are least likely to receive employer-provided health
insurance, are also not likely to be a provider for their families. Among those
with employer-provided health insurance in 2002, 82.9 percent of parents aged 35
to 44 cover children in their family, compared to 60.6 percent of parents aged
18 to 25.
A slight majority of those with employer-provided health insurance from their own employer use this plan to cover their families as well
Slightly more than half of those with employer-provided health insurance are a provider of health insurance coverage to another family member living in their home (Table 1).[2] There are significant gender, race/ethnicity, and age gaps in health insurance providers. In 2002, men were more likely to be health insurance providers than were women, with 56.3 percent of men and 45.5 percent of women providing health insurance to another family member. Whites with health insurance from their employer are more likely to be providers than are other racial/ethnic groups. Young workers (ages 18 to 24) with health insurance from their employer are least likely to provide coverage to other family members: in 2002, 12.7 percent of young workers and 62.2 percent of workers age 35 to 44 provided coverage to other family members.
The largest gap is by
job-related characteristics. Low-wage workers are a little more than half as
likely as high-wage workers to be health insurance providers (33.9 percent
compared to 62.6 percent in 2002). Workers in large firms – 100 employees
or more – are more likely to be providers than are workers in small firms.
In 2002, 54.1 percent of workers with health insurance from their employer in
large firms were health insurance providers, compared to 46.7 percent of those
in small firms.
More providers cover another adult than cover a
child. In 2002, 42.0 percent of providers covered at least one adult, while
only 32.0 percent covered at least one child. However, among providers, they
cover more children, on average, than adults. In 2002, the average number of
adults covered was 1.1 and the average number of children was 1.8. Many of the
adults covered are not spouses, but grown children (over 17) still living in
their parents’ home.
From the peak of the economic expansion
through the economic contraction, between 1999 and 2002, the share of workers
with employer-provided health insurance who cover another family member on their
plan fell by 4.4 percentage points, down to 51.6 percent. The largest declines
in the share of workers with employer-provided health insurance who covered
other family members were among Latino workers (8.3 Latinos percentage points
lower in 2002 than in 1999), women workers (5.5 women percentage points lower),
prime-age workers ages 35-44 (5.4 percentage points lower), low-wage workers
(5.3 percentage points lower), and workers in large firms (4.6 percentage points lower).
Noticeably, the share of workers with employer-provided health insurance
covering a child fell by 4.2 percentage points, more so than the share covering
an adult, which saw a 3.6 percentage point decline. This may be because many
low-wage parents have shifted their children’s health insurance from their
employer-provided health insurance plan to Medicaid. (See
Health insurance Data Brief #5 for more
information on this topic.)
Table 1. Characteristics of Providers |
||
|
Among workers with employer-provided health insurance, share covering other family members |
|
|
1999
|
2002
|
All adults (18 -
64)
|
56.0
|
51.6*
|
Women
|
51.0
|
45.5*
|
Men
|
59.7
|
56.3*
|
White
|
57.1
|
52.9*
|
African-American
|
49.3
|
46.3*
|
Latino
|
52.7
|
44.4*
|
Other
|
56.4
|
52.5*
|
Age group
|
||
18
- 24
|
16.0
|
12.7*
|
25
- 34
|
45.2
|
42.2*
|
35
- 44
|
67.6
|
62.2*
|
45
- 54
|
62.2
|
58.5*
|
55
- 64
|
54.9
|
50.9*
|
Low-wage
|
39.2
|
33.9*
|
High-wage
|
65.9
|
62.6*
|
Fewer than 100
employees
|
49.9
|
46.7*
|
100 employees or
more
|
58.7
|
54.1*
|
Covering adults
|
45.6
|
42.0*
|
Average number of adults
covering
|
1.2
|
1.2
|
Covering
children
|
36.2
|
32.0*
|
Average number of children
covering
|
1.8
|
1.8
|
Source: CEPR analysis of Survey of Income and Program
Participation, 96 and 02 panels.
|
||
Note: Universe is adults (18
to 64) with employer provided health insurance. To increase sample size, we
pooled estimates for Latinos across two years (92/93, 98/99,
01/02).
|
||
* Indicates that change from
past year is significant at the 5 percent level
|
“Dependents” – those receiving
employer-provided health insurance through another family member’s plan
– look very different from providers (Table 2). Women who have health
insurance are twice as likely as men to be a dependent on another family
member’s employer-provided health insurance plan. Nearly half (48.8
percent) of young adults (ages 18 to 24) with health insurance are dependents on
another family member’s employer-provided health insurance plan, compared
to only 30.6 percent of adults ages 35 to 44.
Adults dependent on
another family member’s health insurance plan are less likely to be
employed than to not be employed.[3]
In 2002, 46.1 percent of adults out of the labor force with health insurance
were dependents, compared to 24.5 percent of employed adults. Dependent adults
are also more likely to be low-wage workers and to work in a small firm. In
2002, 35.7 percent of low-wage workers with health insurance were dependents,
compared to 18.2 percent of high-wage workers. In 2002, 29.7 percent of workers
in small firms with health insurance were a dependent, compared to 21.3 percent
of workers in large firms.
As the share of workers providing health insurance to
their family members has fallen between 1999 and 2002, the share of individuals
who are dependents on another family member’s employer-provided health
insurance plan has also fallen. Between 1999 and 2002, the share of women who
had health insurance as a dependent fell by 2.9 percentage points, down to 40.6
percent, while it only fell by 1.0 percent among men, down to 20.4 percent. The
share of Latinos with health insurance that were dependents in 2002 was 3.8
percentage points lower than in 1999. Among young people ages 18 to 24, the
share of those with health insurance who were dependents fell by 5.8 percent
points, down to 48.8 percent, more so than for any other age group.
Table 2.
Percent of Dependents
|
||
|
Share receiving health insurance from a family member's employer-provided health insurance |
|
|
1999
|
2002
|
Adults (18 - 64)
|
32.9%
|
31%*
|
Women
|
43.5
|
40.6*
|
Men
|
21.4
|
20.4
|
White
|
34.8
|
33.3*
|
African-American
|
23.1
|
21.1*
|
Latino
|
31.9
|
28.1*
|
Other
|
32.3
|
31.2
|
Age group
|
||
18
- 24
|
54.6
|
48.8*
|
25
- 34
|
26.0
|
25.1*
|
35
- 44
|
32.5
|
30.6*
|
45
- 54
|
31.5
|
29.9*
|
55
- 64
|
28.6
|
28.8*
|
Employed
|
27.0
|
24.5*
|
Not Employed
|
48.0
|
46.1*
|
Low-wage**
|
40.3
|
35.7*
|
High-wage**
|
18.9
|
18.2*
|
Fewer than 100
employees**
|
32.2
|
29.7*
|
100 employees or
more**
|
23.5
|
21.3*
|
Addendum:
|
||
Children
|
75.7
|
69.2*
|
Elderly
|
13.4
|
15.6*
|
Source: CEPR analysis of
Survey of Income and Program Participation, ‘96 and ‘02
panels.
|
||
Note: Universe is adults with
health insurance. To increase sample size, we pooled estimates for Latinos
across two years (92/93, 98/99, 01/02).
|
||
* Indicates that change from
past year is significant at the 5 percent level
|
||
** Universe is employed
adults with health insurance
|
|
The shift away from dependent coverage between 1999 and 2002 led to a 6.5 percentage point decline in the share of children who were covered by their parent’s employer-provided health insurance plan. By 2002, 69.2 percent of children with health insurance were a dependent on their parent’s employer-provided health insurance plan. The decline among adults over this period was only 1.9 percentage points, not nearly as large as among children.
Firms employing a
disproportionate share of high-wage workers and firms with more than 100
employees more often bear the cost of covering dependents than do low-wage firms
or small-scale employers. Figures 1 and 2 show that in 2002, workers in large
firms and those earning high wages are the ones most likely to be providing
health insurance to their families. Two-thirds (62.6 percent) of high-wage
workers provided health insurance to other family members, compared to only
one-third of low-wage workers (33.9 percent) in 2002. Alternatively, only
one-in-five high-wage workers (18.2 percent) were dependent on another family
member’s health insurance, compared to one-third (35.7 percent) of
low-wage workers. Insured workers in large firms are more likely to be providers
than to be dependents; the reverse is true for insured workers in small
firms.
These figures also show that the share of workers – be they high-wage or low-wage, or in a small or large firm – who are either a provider of health insurance or dependent on another family member’s plan has decreased between 1999 and 2002 as the economy moved from expansion to contraction. The share of low-wage workers receiving health insurance from another family member fell from 40.3 percent in 1999 down to 35.7 in 2002, a 4.6 percentage point drop. It only fell by 0.7 percentage points among high-wage workers.
Over the economic contraction,
fewer workers covered family members through their employer-provided health
insurance. As a result, the share of individuals who are dependent on another
family member’s employer-provided health insurance plan fell. The
declines in coverage were largest for children, young adults, low-wage workers,
and Latinos. It appears that many employers are shifting the responsibility of
their employees’ dependents onto other employers or the federal Medicaid
program. This has important implications for those who have traditionally not
received employer-provided health insurance – women, children, Latinos,
and the unemployed – because they may or may not be able to move to an
employer-provided health insurance plan in their own name. (See
Health insurance Data Brief #5 for more
on this issue.)
The employer-based health insurance system burdens
high-wage employees and larger firms, relative to low-wage employees and smaller
firms. Typically, it is high-wage workers and those in large firms who extend
their health insurance benefits to their families. However, given the high
costs of health insurance coverage, high-wage firms may be rebelling against
covering entire families and increasingly offering to only cover their
employees. Research has found that employers have shifted the costs for family
coverage onto their employees more so than they have the costs for the
individual worker (See Health Insurance Data
Briefs #1). This will lead to hardships for families who must either pay
more for dependent coverage or go without health insurance. In turn, many may
be shifting toward Medicaid, especially for their children (See
Health Insurance Data Briefs
#5).