The majority of Americans—55.7 percent in 2016, according to the Census Bureau—access health insurance through employer-based plans. However, employment does not always result in health insurance coverage, and not all those who report working full time, year round are covered by an employer-based plan. In particular, many low-income workers are unable to access health insurance through their employers.
As policy makers consider changes to the Patient Protection and Affordable Care Act (ACA) and Medicaid, it is important to consider that employment does not necessarily lead to health coverage for lower-income workers in the same way it typically does for higher-income workers. This brief documents differences in health insurance coverage by workers’ income, and explores who is eligible for an employer-based plan, who enrolls in those plans, and the reasons why workers choose not to enroll.
Low-Income Workers Much Less Likely to Have Employer-Based Health Insurance
Workers aged 25–64 employed full time, year round (that is, working at least 35 hours per week for 52 weeks in the previous year) participate in a range of health insurance arrangements. Just one-third of low-income workers, defined here as those with incomes below 200 percent of the official poverty threshold (see Box 1 on page 2), hold their own employer-based insurance, compared with more than half of higher-income workers. In addition, there is a stark income difference in the share of workers who are covered as a dependent on someone else’s employer-based insurance, such as a spouse’s: 2.5 percent of low-income workers report this kind of insurance, versus 12.0 percent of higher-income workers.
Current Issue - May 2024