Young Workers Fail to Flock to Employer Health Plans - Take-Up Rates Among Those Under 30 Show Unexpected Decline

From The Wall Street Journal:

Young workers in the U.S. signed up for employer-sponsored health plans at a lower rate than last year, a surprising result that helped keep overall workplace enrollment rates flat.

Companies had been bracing for a big bump in the number of workers signing up for workplace plans because of the new government mandate that most American adults buy health insurance or pay a penalty.

But new data on worker behavior for the 2014 coverage year from payroll-services company Automatic Data Processing Inc. suggest that surge of enrollment never happened, at least broadly across large companies.

 

A separate analysis by benefits consultant Aon Hewitt also found little overall growth in enrollment among those eligible for workplace health coverage.

Instead, enrollment as a percentage of those eligible for coverage was largely unchanged, ADP found.

Continuing a longer-term trend, younger workers' take-up of company health plans declined, meaning participation fell as a percentage of those eligible to enroll.

 

One possible culprit: Rules that kicked in during 2010 allowing parents to keep children on their own health plans through age 26. That likely explains much of the longer-term decline in workplace coverage among younger workers, health-care analysts say.

 

Alternatively, younger workers may have decided to skip coverage altogether, gambling that they would remain healthy and preferring to conserve cash, instead of paying insurance premiums.

That scenario is especially likely given that employers continue to shift a greater proportion of health-care costs to employees, Dr. Ho said. The ADP data indicate that trend continued into this year.

 

Lower participation by younger people, who are assumed to be healthier and therefore cheaper to insure, has been a significant concern with the public health-insurance exchanges established under the Affordable Care Act. The same assumptions hold true for workplace plans, ADP's Mr. Ryan said.