Five Smart Things You Can Do with Life Insurance Cash Value

If you have accumulated significant cash value within a permanent life insurance policy, congratulations. Your planning and decision to save within such a policy is likely paying off.

Thanks to the tremendous tax advantages that Congress has given to provide for incentives for families to protect themselves with life insurance, and to the protection aspect itself, a life policy is a great place to keep money.

That said, let’s look at some of the most common options for dealing with your policy’s cash value:

Stay put -Let life insurance be life insurance. Your money is growing tax-deferred within the policy. And in the event of your death, an amount much greater than your current cash value will generally pass to your heirs, tax-free.

That’s a significant benefit right there, and a compelling reason not just to let your policy grow, but to add more premium to it if you can.

Borrow against the death benefit – You can withdraw accumulated dividends, and then borrow against the rest of it, generally with no tax consequence, as long as you don’t completely surrender the policy.

Interest will accrue, but you don’t have to repay the loan yourself unless you want to. If you don’t pay it back, the insurance carrier will simply subtract the balance due from any death benefit they pay to your beneficiaries.

Cash out the policy altogether – This option lets you get substantially all the cash in your policy. However, you may be subject to capital gains tax to the extent your cash value exceeds the amount you paid in.

Exchange for another life insurance policy – If you choose, you can execute a Section 1035 exchange of one life policy for another, tax-free.

You may opt to do this if you find ongoing premiums at a new carrier are lower for some reason, or if you want some specific protections or riders you can’t get from your old carrier.

For example, you may be able to exchange a straight-ahead universal or whole life insurance policy for a policy that also provides a benefit in the event you need long-term care insurance.

Exchange for an annuity – You can also exchange a life insurance policy for an annuity, tax-free, under Section 1035.

You might choose to do this if you decide you no longer want the life insurance protection, but you do want regular and reliable income.

For example, if your beneficiaries are grown up and no longer rely on your life insurance death benefit, you may execute a 1035 exchange to a lifetime income annuity – maximizing your income over your expected lifetime, rather than paying a large death benefit.

You can choose a joint and survivor annuity to guarantee income to your spouse as well.


The takeaway

Life insurance is among the most flexible and powerful resources you can have in your portfolio as you grow more established. But to have all of the above options later in life, you must plan ahead now.

Talk to us today. We can help you develop a plan that meets your needs and financial objectives.


Insurers to Rebate Record Amount of Premium

Health insurers are set to refund a record amount to consumers who purchased health plans on government-run marketplaces or in the private market during the last few years. 

Rebates for individuals who bought their health plans from Affordable Care Act marketplaces will average $420 apiece, according to a report by the Kaiser Family Foundation. In total, health insurers are expected to refund $1.97 billion to 4.7 million people who purchased coverage on exchanges around the country.

Not everybody who has an individual market plan will see a refund. Only policyholders whose insurer spent less than 80% of their premiums on claims will have to be paid back.


How the rebates will be paid

Insurers can pay out the rebates by issuing a premium credit to people who are insured by the same company as they were in 2019 (for those who are currently enrolled with the same insurer as in 2019), or as a lump-sum payment. Last year, most insurers paid out rebates by check as a lump sum. 

Rebates that will be issued in 2020 are based on the insurer’s financial performance in 2017, 2018 and 2019. 

The ACA requires that insurers refund policyholders under the law’s medical loss ratio provision, which requires them to spend at least 80% of their premium income (85% for large group plans) on claims and quality improvements over the previous three years. Insurers that do not meet that requirement must refund the difference as rebates.

The goal is to have insurers spending the majority of your premium dollars on medical claims so that rebates aren’t necessary.

But because insurers set their premiums a year in advance, they usually cannot predict how many policyholders they will have or how much they will pay out for claims. The rebates serve as a backstop, ensuring that even if premiums are ultimately set too high in a given year, policyholders will be paid for essentially being overcharged.

The majority of insureds do not receive a rebate check, as most insurers’ administrative costs are less than the allowable amount.

The high rebate estimates come as insurers are working on submissions to regulators for proposed premiums for 2021 in the midst of uncertainty about how the coronavirus pandemic will affect health care costs.

But even if they lose money in 2020, insurers could still owe money to consumers in 2021 because the refunds are based on the previous three years, and health insurers made high profits in the ACA markets in 2018 and 2019.


Concerns Rise Over Letting Employers Fund HRAs for Individual Health Plans

Employers, health insurers, regulators and hospitals are all raising concerns about the Trump administration’s rules issued last year that allow employers to fund health reimbursement arrangements (HRAs) that their workers can use to purchase health plans on the open market.

The Centers for Medicaid and Medicare Services, IRS and Department of Labor issued the final rules in late 2019. They reverse one of the major pinch-points of the Affordable Care Act, which bars employers from paying employees to buy their own health insurance either on publicly run health insurance exchanges or on the open market.

The fine for breaching this part of the law is a hefty $36,500 annually.

The rules continue to receive pushback from small business groups, insurers, regulators and others, who say that employers who want to go this route are facing a bureaucratic nightmare.

And one of the biggest concerns is that employers will use the opportunity to move older and sicker workers from their group health plans to exchanges, in order to reduce the cost burden on their plans.

Complexity a major issue

The National Federation of Independent Business has said that small businesses that want to offer workers an HRA integrated with an individual-market health plan are facing a lot of complexity.

“NFIB recommends that your departments plan to release… a publication that explains in plain English, step-by-step, how small businesses can establish, administer, and comply with the rules,” the group wrote.

HRAs are tax-sheltered accounts funded employers that typically are offered to reimburse employees for out-of-pocket medical expenses. This rule expands how those HRAs can be used. HRAs have been tax-advantaged only if they are coupled with an ACA-compliant group health plan. They cannot be used now to pay premiums for individual-market health insurance.

Under the rule, employers could provide an HRA that is integrated with individual health insurance coverage. The rule does include provisions to prevent employers from steering workers or dependents with costly health conditions away from the employer group plan and toward individual coverage.

Employers also could offer a different type of HRA, funded up to $1,800 a year, that could be used by employees to pay premiums for short-term plans that don’t comply with ACA consumer protections.

Employers could not offer the same employees the choice of either a traditional group plan or an HRA-funded individual-market plan. But they could offer a group plan to certain classes of employees, such as full-time workers under age 25, and an HRA plan to other classes, such as part-time employees.

Fears many may be shunted from group plans

Other concerns that are being raised include those by the American Academy of Actuaries that self-insured employers in particular may use the rule to shunt less healthy employees out of their group health plans, which in turn could result in worsening the ACA individual-market risk pool.

The Federation of American Hospitals expressed concern that the proposal would shift people out of the employer group market into the less stable individual market, which offers thinner benefits and less support for consumers.

The conservative National Federation of Independent Business supports the new rule, but is concerned that it will be a complex process to set this type of arrangement up, especially for small businesses.

The liberal Center on Budget and Policy Priorities said the proposal to let a special type of HRA be used to buy short-term plans could be challenged legally, because the ACA and the Health Insurance Portability and Accountability Act (HIPAA) prohibit group plans from discriminating based on health status, as short-term plans are allowed to do.


Lower-Income Gen Xers, Baby Boomers Will Run out of Money in Retirement: Study

Recent research showed that baby boomers and Generation Xers who are in the lower income brackets are more likely to fall short of their retirement goals, which will leave them lacking enough money to live on.

Researchers at Northwestern Mutual Planning & Progress found that that some people may run out of funds within their first year of retiring, and that 22% of Americans have less than $5,000 saved for retirement.

Even some people who fell in the highest income brackets would likely run out of money at some point during retirement.

The outlook for many of their futures remains grim. The survey found:

  • 22% of Americans have less than $5,000 saved for retirement.
  • 15% have no retirement savings at all.
  • 56% don’t know how much money they need to retire comfortably.
  • 41% are taking no steps to prevent themselves from running out of retirement savings, though many see this as a possibility.

After gathering these findings and analyzing them, researchers point out that people who are in the lowest income bracket are extremely vulnerable.

With the possibility of not only running out of funds but running out quickly, people who are in this category should be concerned and take steps to enhance their retirement preparedness.

People in all categories, however, can find themselves at risk, and each person’s likelihood of running low on funds will depend not only on their current financial status, but also on their health status. Not all health issues are predictable, and what exists now may be complicated later.

Some people may need extra funds for health care. Even if health facilities for skilled nursing care will pay 100% of costs, some households will still run out of money far before they should.


What to do

First off, do not expect Social Security to keep you afloat in your golden years. It won’t provide enough income for you to live off in retirement. If you’re like the typical recipient, your benefits will cover roughly 40% of your previous income, assuming that Congress doesn’t move to slash future Social Security benefits.

If you have not started saving for retirement, regardless of your age, start doing so now. Thanks to compounding interest and earnings, the more you start socking away now, the more money you can earn in your retirement funds in the future.

If you begin setting aside a decent chunk of money each month, and continue doing so consistently for the remainder of your career, you have more than enough opportunity to catch up.

The following shows how much money you would have when you retire at the age of 67 if you start putting away $500 a month at different ages:

  • 37 years old: $567,000
  • 42 years old: $379,000
  • 47 years old: $246,000
  • 52 years old: $151,000
  • 57 years old: $83,000


You should review your retirement plan and accounts annually and increase how much you set aside if you feel you are not meeting your retirement savings goals. It’s never too late. Update your options as needed, and take into account any long-term changes in health conditions.

To learn more about your options, call us.

IRS Continues Ramping Up ACA Compliance Efforts

Despite lawsuits aiming to overturn the Affordable Care Act, the law is still very much in play for large employers who are required to provide health coverage for most of their full-time and full-time-equivalent workers.

The IRS has continued to ramp up enforcement of the ACA’s mandate that large employers provide affordable health coverage to their full-time employees.

For the 2018 plan year, the IRS sent around 90,000 letters seeking to collect approximately $12 billion in employer shared responsibility payments (ESRPs), up from $4.4 billion and 30,000 letters in 2015.

Applicable large employers (ALEs) that fail to comply with the mandate are liable for employer shared responsibility payments, which are essentially a penalty in the guise of a tax.

If the IRS, through a company’s tax filings, concludes that an employer is skirting their responsibility under the law, it will send them Letter 226-J, which is essentially the agency’s first step toward enforcing the ACA mandate and imposing liability for failing to secure coverage for their workers.

But if you are one of the employers who receives this letter, you will need to brace yourself for compliance reporting if you want to prove that you are not in breach of the law. The key to coming out unscathed from this is to have solid evidence of compliance. Such evidence should be shared across departments in your organization.

The ACA large-employer mandate requires that any employer of 50 or more workers (or full-time equivalents) must offer at least 95% of its full-time employees health coverage that is affordable (a percentage of their family income) and provides certain essential benefits as prescribed by the law.

Sometimes the letter has been generated because:

  • An employee made a mistake and claimed a tax credit for the cost of their employer-sponsored health insurance.
  • The IRS thinks you may not be offering enough of your employees’ health coverage.


ESRP fines can vary depending on the infraction

  • Failure to offer minimum essential coverage: $2,500 per employee for the 2019 policy year. This penalty applies if in any month in the tax year, the minimum coverage is not offered to at least 95% of a company’s full-time employees (and their dependents), and if at least one full-time employee receives a premium tax credit (PTC) for purchasing coverage through the marketplace.
    How it works: If a company in 2019 has 300 full-time employees, and one of those employees receives a PTC for 12 months, the cost of the penalty would be $675,000.
  • Failure to offer coverage that meets affordability and minimum value: $3,750 per employee in 2019. This penalty is assessed if Internal Revenue Code Section 4980H(a) does not apply for a given month.
  • Failure-to-file penalty: $270 per return in 2019. This applies to employers that do not file correct information returns for 2019.


What should you do if you receive Letter 226-J?

You will have to act fast. You have 30 days to develop a comprehensive response to the IRS’s assertion of liability. The IRS will initiate a collection process if you fail to respond on time.

Here’s what health compliance attorneys recommend:

  1. Call the IRS number included on the ESRP Response Form 14764 and request a 30-day extension to respond.
  2. Contact the entity your accounting or law firm (whichever you use to communicate with the IRS).
  3. Contact your benefits agent or the brokerage that you use for your group health plan and for ACA reporting. They can help collect data necessary to respond to the IRS.

Life Insurance Benefits That Kick in Prior to Death

Most prudent individuals with a family have life insurance in place, but what happens if you have a life-debilitating illness or injury that leaves you incapable of working and which renders you struggling to hang on to life?

The financial consequences of a terminal illness can be catastrophic. Developing cancer, suffering a heart attack or being seriously injured in an accident can leave you and your loved ones scrambling to make ends meet.

For people in that position, it makes sense for life insurance benefits to kick in so that they can be used while the covered individual is still alive.

The term for this type of insurance is “living benefits,” which typically comes in the form of a rider to a life insurance policy. A living benefits rider helps people to receive care and pay for chronic or terminal illness that precedes death.

The rider entitles the policyholder to an early and accelerated payout of policy death benefits, if the insured is diagnosed to have a life expectancy of 12 months or less.

The rider can help make the insured’s remaining time as comfortable and as dignified as possible, and also keep the family from financial ruin.

Often the majority of our health care expenses come during our end-of-life stage. And that leaves many terminally ill patients facing financial hardship during the worst possible time.

Unfortunately, a simple life insurance policy will not step in to pay benefits until the insured has passed. The living benefits rider breaks down that barrier.

The policyholder can access up to $250,000 or more of eligible policy proceeds, depending on the type of contract.

This payment, made to the policyholder rather than the beneficiary, reduces the cash value and death benefit, so it dilutes what the policyholder’s beneficiaries will receive upon his or her death.

Policyholders without this rider and in this situation have two options for accessing funds:

•          A policy loan

•          A policy surrender


In most cases, however, the rider may provide more funds than either of these options.

This is because policy loans or surrenders are usually based on cash value, while the amount available from the living benefits rider is generally based on the policy’s face value, paid-up additions, and (if applicable) an amount payable under a rider that provides a level amount of insurance.

The rider may be exercised only once and it will be terminated once the policyholder makes a claim for accelerated benefits.

At the policyholder’s request, this rider can be added to new or existing policies for a one-time charge, which is applied when the rider is exercised.

The policy owner merely has to elect living benefits coverage, and can choose to do so anytime.

Benefits are tapped when the policyholder presents the insurance company with proof that they have a terminal illness or have been given a certain time to live based on their circumstances.

If you have any questions about this voluntary benefit and why you should consider offering it to your employees, contact us today.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Don’t Rely on Employer Life Insurance Coverage Alone

Fewer employers are offering life insurance to workers as an employee benefit.

Only 48% of employers offered life insurance as an employee perk, as of 2016. This reflects a steady decline of 23% compared to 2006 levels, according to the Life Insurance Marketing and Research Association (LIMRA).

The decline is curious, given that some six in 10 employees rank employer-paid life insurance as an “important” or “very important” part of an employer’s benefits package.

Americans are underinsured

Americans are dangerously under-protected when it comes to life insurance. Three in four American households without life insurance report they would have immediate or near-immediate trouble paying for basic living expenses in the event of the death of a primary wage earner.

But relying solely on group life insurance coverage from your employer may not be sufficient. Tax laws limit the deductibility of employer-paid life insurance premiums to those required to provide a death benefit of $50,000, when many American working families need several times that amount of protection.

Even among those who have group life insurance from their employers, half still report they would have immediate or near-immediate hardship in the event of a breadwinner’s unexpected death, according to LIMRA figures.

Own your own coverage

Even if employers weren’t cutting back on life insurance as an employee benefit, there are many good reasons to contact an insurance agent and take out your own life insurance policy. Here are five of them:

  1. It goes where you go. If you leave the firm, you may lose your coverage. If you have a history of health issues, it may       be difficult or impossible to get life insurance at that time. If you own your own policy, you don’t have to worry about             losing your life insurance when you leave the company.

    2.  More coverage. While employers often limit what they’ll pay for to a death benefit of $50,000, or one to two times your      salary, this may not be nearly enough. Experts often recommend owning at least 10-20 years’ worth of your current         income in life insurance protection – particularly for younger families early in their careers.

    3.  More features. While most workplace life insurance policies are one-size-fits-all, buying your coverage from an agent in      the open market means you can customize your insurance policy. For example, you can choose whole life or universal life      insurance for permanent life insurance that accumulates cash value.
    You can also get coverage to cover your spouse or domestic partner, whether or not they are working. Or you can choose      to layer affordable term insurance with permanent coverage and convert your term insurance to more valuable permanent      coverage over time, as your income increases.

    4.  Broader protection. As you go through your insurance needs analysis, you may uncover the need for other forms of        insurance protection not provided by your employer. Since 2006, employers have become less likely to offer important      insurance benefits like long-term care insurance, critical illness or cancer insurance and long-term disability coverage.

    5.  You control the policy. If you get all your life insurance from your employer, they could shut their doors, lay you off, go     bankrupt, or simply cancel the benefit tomorrow. Again, if you’ve had medical problems, it could be difficult or impossible     for you to line up replacement coverage.   By owning your own policy and not relying on your employer, you guarantee     that no one can terminate the policy except you.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Employers Rethink HDHPs as More People Struggle with Medical Bills

As the number of employers offering high-deductible health plans continues growing, the spotlight recently has highlighted an inconvenient truth: some employees are going broke and filing bankruptcy because they cannot afford all of the out-of-pocket expenses and deductibles they must pay in these plans – just like the bad old days in the 1990s and 2000s.

Besides being in plans with high deductibles, many employees are also paying more for coverage as employers have shifted more and more of the premium burden to their staff.

Making matters worse, studies are showing that many people with HDHPs are forgoing necessary treatment and not taking the recommended dosages of medicines because they can’t afford the extra costs.


  • Enrollment in HDHP plans grew to 21.8 million in 2017, up from 20.2 million the year prior, and 5.4 million in 2007, according to a report by America’s Health Insurance Plans.
  • Nearly 40% of large employers offered only high-deductible plans in 2018, up from 7% in 2009, according to a survey by the National Business Group on Health.
  • 50% of all workers had health insurance with a deductible of at least $1,000 for an individual in 2018, up from 22% in 2009, according to the Kaiser Family Foundation.


Despite that, a 2017 report by the Centers for Disease Control and Prevention found that 15.4% of adults in HDHPs in 2016 had issues paying bills, compared to 9% of those with other types of insurance. And there have been a number of news reports about the deep financial toll on HDHP enrollees that have suddenly been hit by serious maladies.

Meanwhile, the average deductible for a family had risen to an average of $4,500 in 2017 from $3,500 in 2006, according to the Kaiser-HRET 2017 survey of employer-sponsored health plans.

As a result, some employers are rethinking their use of these HDHPs and trying to reduce the burden on their workers, according to news reports.

Skimping on care

Studies show that many put off routine care or skip medication to save money. That can mean illnesses that might have been caught early can go undiagnosed, becoming potentially life-threatening and enormously costly for the medical system.


A study by economists at University of California, Berkeley and Harvard Research, published in the Journal of Clinical Oncology

Findings:  When one large employer switched all its employees to high-deductible plans, medical spending dropped by about 13%. That was not because the workers were shopping around for less expensive treatments, but rather because they had reduced the amount of medical care they used, including preventative care.

The study found that women in HDHPs were more likely to delay follow-up tests after mammograms, including imaging, biopsies and early-stage diagnoses that could detect tumors when they’re easiest to treat.

A report by the Robert Graham Center for Policy Studies in Family Medicine and Primary Care, published in
Translational Behavioral Medicine

Findings:  People with HDHPs but no health savings accounts are less likely to see primary care physicians, receive preventive care or seek subspecialty services. Compared to individuals with no deductibles, those enrolled in HDHPs without HSAs were 7% less likely to be screened for breast cancer and 4% less likely to be screened for hypertension, and had 8% lower rates of flu vaccination.

The study authors noted that although more individuals have health insurance under the Affordable Care Act, premiums and deductibles have increased, leaving many Americans unable to afford these costs.

Oddly, many people in HDHPs are also forgoing preventative care services, even though they are exempted from out-of-pocket charges, including the deductible under the ACA. This is likely because most people don’t know that the ACA covers preventive care office visits, screening tests, immunizations and counseling with no out-of-pocket charges. As a result, they do not benefit from preventive care services and recommendations.

Companies with second thoughts

A few large employers – including JPMorgan Chase & Co. and CVS Health Corp. – recently announced that they would reduce deductibles in the health plans they offer their employees or cover more care before workers are exposed to costs.

CVS Pharmacy, part of CVS Health Corp., in 2013 had moved all of its 200,000 employees and families into HDHPs. During routine questionnaires, CVS later found that that some of its employees had stopped taking their medications because of costs. The company, in response, expanded the list of generic drugs its employees could buy for free to include some brand name medications, as well as insulins.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

A New Health Care Model Tackles Costs, Quality Care

As group health insurance costs continue rising every year, more employers are embracing a new plan model that aims to both cut costs and improve outcomes for patients.

This trend, known as value-based primary care, is a bit of an umbrella term for various models that involve direct financial relationships between individuals, employers, their insurers and primary care practitioners. Insurers are experimenting with different model hybrids to find better care delivery methods that reward quality outcomes and reduce costs.

This new approach was made possible by the Affordable Care Act and the Medicare Access and Child Health Plan Reauthorization Act. And as the future of the ACA remains in doubt, the enabling parts that allowed for this system of payment reform that rewards health care providers that produce better quality outcomes for lower costs will likely remain intact.

And now more health plans are adopting this model. The 2016 “Health Care Transformation Task Force Report” found that the share of its provider and health plan members’ business that used value-based payment arrangements had increased from 30% in 2014 to 41% at the end of 2015.

In a McKesson white paper, payers reported that 58% of their business has already shifted to some form of value-based reimbursement.


How does it work?

First, let’s look at what the value-based primary care model is not: it’s not a fee-for-service system, under which when doctors see a patient and deliver care, they then bill the insurer a fee that is directly tied to the service they provided.

Fee-for-service arrangements have a fee schedule that lists the usual and customary charges for thousands of different procedures. The payment amounts will vary also based on the

reimbursement rate negotiated between the insurer and health care provider.

The part of the equation that’s missing is that the there is no direct link between the payment and the outcomes of the care. The insurer does not look at if a person was cured or has recovered successfully. There is only a link between the service provided and the payment.

Many value-based models provide a payment bonus to doctors and hospitals that produce better quality outcomes, like if they have more patients who don’t relapse or who recover at a slower pace and require more doctor visits.

Providers of value-based primary care typically charge the health plan a monthly, quarterly or annual membership fee, which covers all or most primary care services, including acute and preventive care.

The main goal is to get away from the fee-for-service system which puts pressure on doctors to only provide very short primary care visits with their patients, who will often send the patient out for unnecessary high-margin services such as scans and specialists and/or write excessive prescriptions. By eliminating this billing structure, doctors are able to practice more proactive care, which can reduce or eliminate certain future health care costs.

But just because the model is patient-focused, it does not mean that costs are higher. Proponents of value-based care say the focus on patients, and focusing on preventative and forward looking care rather than reactive care, reduces overall costs, which should be reflected in premiums.

Some benefits to patients include:

  • More time with their doctor
  • Same-day appointments
  • Short or no wait times in the office
  • Better technology, e.g., e-mail, texting, video chats, and other digital-based interactions
  • 24/7 coverage by a professional with access to their electronic health record
  • More coordinated care.


Vale-based care also improves provider experience and professional satisfaction, which, in turn, is known to improve the quality of care.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Number of Employers Offering Coverage Grows

The number of companies offering health insurance to their employees has risen for the first time in a decade, according to new research from the Employee Benefit Research Institute.

In 2017, almost 47% of private-sector employers offered health insurance, up from 45.3% in 2016. The percentage had previously been dropping steadily since 2008, when more than half (56.4%) were providing coverage.

The trend continues that the larger the company, the more likely it is to offer coverage, with 99% of firms with 1,000 or more employees offering health benefits.

Interestingly, the pre-Affordable Care Act numbers are higher than the post-ACA numbers, despite the fact that the law required employers with 50 or more full-time workers to provide most of their staffers with health coverage.

And the fact that numbers started ticking higher in 2017 points not so much to the results of the ACA, but that the labor market is tightening and as competition for talent increases, more employers are adding health coverage to their benefit packages, according the EBRI’s analysis.

The increases have been across all business sizes.

The percentage of employers offering health benefits in 2017, compared to 2015, is:

  • Employers with fewer than 10 employees: 23.5% in 2017, up from 22.7% in 2015.
  • Employers with 10-24 employees: 49.2%, up from 48.9%.
  • Employers with 25-99 employees: 74.6%, up from 73.5%.
  • Employers with 100‒999 employees 96.3%, up from 95.1%.


Another interesting development is the percentage of workers who are eligible to receive health coverage at their employer also ticked up to the highest level since 2014, the year the ACA took effect. But the number was still not as high as in 2013.

The percentage of employees eligible for health insurance is as follows:

  • 2013: 77.8%
  • 2014: 75.4%
  • 2017: 76.8%


The takeaway: Coverage matters

The EBRI attributes the increases in both the above metrics on the fact that workers have been migrating to jobs that offer health coverage. It also puts the changes down to the strong economy, the tighter job market and the fact that group health insurance rates have been increasing at a moderate clip of about 5% a year.

It also indicates that more employers are offering coverage to recruit and retain talent.

There has been a significant drop-off among small employers offering coverage since the recession hit in 2008 (when 35.6% of firms with fewer than 10 employees offered it, a percentage that dropped to its nadir in 2016 of 21.7%).

EBRI analysts cite many factors for the larger decline in coverage offering among the smallest employers, including the effects of the recession on their businesses and the fact that their employees could get coverage on exchanges at relatively low rates thanks to government subsidies.

The overall uptick in 2017 was largely driven by small employers, meaning that they are likely having to step up to compete for talent. As competition for talent will likely continue to grow, it’s likely that more employers will continue adding health benefits, in addition to other voluntary benefits, to sweeten the pot.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.