Employer Sponsored Health Plan Enrollment Dropped 5% During Pandemic

Employer-sponsored health plan enrollment decreased by 5 percent during the COVID-19 pandemic, with the steepest declines among women and individuals working for small employers, according to a study published in JAMA Network Open.

The study reflects data on individuals from large and small employers who were enrolled in select commercial health plans between January 1, 2019, and June 30, 2021.

Researchers defined January 1, 2019, to March 31, 2020, as the pre-COVID-19 period, while April 1 to December 31, 2020, and January 1 to June 30, 2021, were the exposure periods.

At the beginning of the study period in January 2019, employer-sponsored health plan enrollment was at 13,346,213 members. Enrollment increased to 14,083,411 members in January 2020.

During the pandemic, enrollment fell to 13,586,944 in December 2020 and continued declining to 13,359,615 in June 2021. This marked a decrease of 723,796 members, or 5.1 percent, between January 2020 and June 2021.

A portion of these losses may be attributed to a lack of employment in the US when the pandemic hit. However, employer-sponsored insurance coverage decreased even as unemployment rates fell from 14.7 percent in April 2020 to 6.7 percent in December 2020.

The mean adjusted monthly enrollment per hospital referral region (HRR) declined from 45,852 before the pandemic to 44,851 during the 2020 exposure period, the study noted.

Enrollment decreases were disproportionately larger among women and members with small employers. These findings reflect the pandemic’s impact on small businesses in particular and the reported reductions in the female labor force during this time.

Given the study’s focus, researchers could not attribute disenrollment to job loss versus voluntary withdrawal and could not assess employers that went out of business during the pandemic.

Researchers stressed the importance of monitoring the pace of commercial insurance enrollment in 2022.

Data from AHIP has already provided some insight on 2022 employer-sponsored health plan enrollment.

For example, California has the highest share of individuals enrolled in employer-sponsored health plans at 18,985,300 members—almost half of all Californians. In Texas, 13,992,200 employees were covered by an employer-sponsored health plan or 48 percent of the state’s population.

The cost of employer-sponsored health plans has also been in the limelight as open enrollment approaches.

Deductibles, premiums, and other out-of-pocket expenses have increased for employees in recent years. Between 2020 and 2021, the average annual employer-sponsored health plan premium increased by 3 percent, rising to $7,380 for individuals and $21,381 for families.

Additionally, employers expect to see moderate to significant increases in healthcare costs over the next three years, which may be passed on to employees through higher premiums.