A Cause for Celebration and a Call to Action: Ensuring Employer-Provided Health Coverage Continues to Thrive for Another 50 Years
Nearly half of the total United States population has employer-provided health coverage.1 As one of the nation’s largest not-for-profit healthcare organizations, CareFirst BlueCross BlueShield covers nearly 2.5 million members through their own or a family member’s employer-provided plan. Health coverage for employees and their dependents through their place of employment has existed in the United States since the late 19th century. However, employer-provided health coverage has been shaped by various political, societal, and economic shifts over time.
In September we celebrated the anniversary of perhaps the most significant of those shifts, enactment of the landmark Employee Retirement Income Security Act of 1974 (ERISA). ERISA fundamentally changed how self-insured employers could offer health benefits, and permanently changed how employers offer coverage to their workers and their dependents. ERISA similarly reformed the retirement benefit space. As ERISA celebrates its 50th anniversary, we applaud Congress and the healthcare industry for recognizing this milestone, and we urge policymakers to safeguard ERISA to ensure employer-provided health coverage remains accessible and affordable for American families.
Honoring ERISA’s Significance to Employer-Provided Health Coverage
Prior to ERISA, states were primarily responsible for regulating employee benefits, resulting in a patchwork of disparate state laws employers had to navigate before offering pension or health benefits to their workforce. To encourage employers to offer such benefits and enable consistent administration, ERISA established a legal framework that preempted state law in favor of a uniform federal standard. ERISA preemption allows employers with workers residing in various states to administer the same or similar benefits across their entire workforce, enabling employers to design affordable self-insured benefit plans that do not need to be ‘customized’ for particular states and do not discriminate among members based on their geography. Research shows the streamlined framework ERISA preemption provides is working. 98% of firms with 200 or more workers offer health benefits to at least some workers, and 94% of firms with 50 or more workers offer health benefits.2
This year, many took the opportunity to commemorate the 50th anniversary of ERISA. In April, the U.S. House of Representatives Committee on Education & the Workforce held a hearing, The Path to Higher Quality, Lower Cost Health Care, where employers emphasized the critical role ERISA preemption plays in their ability to offer high-quality health coverage. In September, CareFirst held a virtual event to highlight employers that have implemented successful well-being programs and other unique solutions to help control costs while meeting the needs of their workforce.
Additionally, the Committee on Education & the Workforce held a second hearing on the value of employer-provided health benefits, where Members of Congress and witnesses touted the innovation in health benefit design made possible by ERISA. Several organizations also hosted an ERISA symposium and gala in Washington, DC to reflect on the achievements and impact of ERISA over the past 50 years.
Despite the widespread acknowledgement of ERISA’s significance, there have been legal challenges to the scope of ERISA preemption and the Supreme Court has been called upon in several cases to draw lines between the states’ regulation of health insurance and ERISA’s provision of a uniform federal standard for employee health plans. Preserving broad ERISA preemption is essential for employer-provided health coverage to thrive in an economy in which employers operate in multiple states and workers and their families are becoming increasingly remote and mobile.
Employer-Provided Health Coverage Works For the American Workforce
Since 2019, roughly 60% of all non-elderly individuals in the U.S. with health coverage were enrolled in employer-provided health coverage.3 It serves as the coverage source for many workers, facilitating access to essential healthcare services that contribute to our nation’s overall health and economic prosperity. It is worth noting that Americans are happy with their employer-provided health coverage. In fact, 63% of respondents to an AHIP survey were satisfied with their current employer-provided coverage, and two-thirds (68%) of workers prefer to get their coverage through their employer rather than through government programs.4 Furthermore, the American workforce clearly values quality health benefits. A recent survey found nearly three-quarters of employed Americans would accept a job with a slightly lower salary if it offered better healthcare coverage,5 proving that providing high-quality health benefits is a powerful recruitment and retention tool for employers. Similarly, the Bipartisan Policy Center found employees were twice as likely to switch careers and less inclined to recommend their employer to others if their health coverage failed to meet their needs.6
Given employer-provided health coverage’s prominence and popularity, we must leverage the unique position of employers to drive benefit design and initiatives that prioritize equity, value, quality, and affordability. Preserving ERISA preemption will enable employers to continue to effectively serve their employees through innovative benefits that improve the health of our country’s workforce.
Employer-Provided Health Coverage Needs to Be Protected
For five decades, ERISA-based employer-provided coverage has adapted to significant challenges like substantial shifts in the labor force and economy and the recent global pandemic. The value of ERISA preemption has grown accordingly. The recent surge in remote work has led to more companies operating as multi-state employers, increasing the utility of uniform benefit administration in the delivery of health benefits. Additionally, the need for innovation has become paramount as employers strive to develop new approaches to attract talent and control costs, while simultaneously improving health outcomes.
As we look forward to the next 50 years, ERISA should be protected and strengthened to continue to empower employers to offer creative, valuable health benefits that contribute to the growth, stability, and success of the U.S. economy and the overall health of Americans.
1Hale J, Hong N, Hopkins B, Lyons S, Molloy E, Congressional Budget Office Coverage Team. Health Insurance Coverage Projections For The US Population And Sources Of Coverage, By Age, 2024–34. Health Affairs. 2024.
22023 Employer Health Benefits Survey. KFF. 2023.
3KFF. What are the Recent Trends in Employer-based Health Coverage? 2023.
4AHIP. The Value of Employer-Provided Coverage. 2023.
5Voya Financial Survey. 2024.
6Bhatnagar S, Strong K, Newell B, Serafani Weber M, Hoagland G. Improving and Strengthening Employer-Sponsored Insurance. Bipartisan Policy Center. 2022