How Small Employers Can Offer Health Care Coverage to Their Workers Without Putting Them Out of Bankruptcy: Risk and Insurance

Derrick Wong is the benefits practice leader at Risk Cooperative, a minority-owned insurance brokerage and risk consulting firm based in Washington, DC. He holds a BS in Business Administration from St. John Fisher College and has over 12 years of experience as a licensed professional in the health insurance industry. Derrick can be reached at [email protected]

The Affordable Care Act (ACA) extended health coverage to more than 20 million uninsured Americans and strengthened consumer protections. However, the legislation did not substantially change employer-sponsored coverage, the primary source of private health insurance in America.

Despite the widespread availability of employer-sponsored health insurance, low-wage workers, particularly in the health care sector, continue to face overwhelming challenges in obtaining adequate and affordable coverage.

A 2019 U.S. Census Bureau report indicates that the healthcare workforce includes nearly 7 million people in three categories of low-paying healthcare jobs:

  • Health care support workers (beneficiary attendants, medical assistants and pharmacy aides)
  • Direct care workers (home health care workers, orderlies and orderlies)
  • Health service workers (housekeepers, janitors and food service workers in hospitals and nursing homes)

According to the US Bureau of Labor Statistics, the average wage for direct care workers was just $14.15 per hour in 2021, nearly $8 less than the average wage in the United States. .

In the context of a continuing and growing shortage of health care workers, the demand for home care and personal care services is expected to increase by 33% by 2030. As babies Boomers are aging and the population of Americans over 65 grows, this increase in demand for workers, without ensuring them adequate access to health care, is concerning.

For one thing, the rising costs of employer-sponsored coverage lower the wages of these low-income workers, because health insurance makes up a larger share of their total compensation. In fact, the costs of health insurance and medical care have pushed up to 7 million people from low-wage households into poverty.

Additionally, the prohibitive cost of providing health insurance makes it more lucrative for companies to eliminate low-skilled jobs through offshoring and automation.

Current ACA guidelines favor Large Applicable Employers (LEAs) who have the resources to meet regulatory requirements and provide high-quality health insurance; while smaller FTAs ​​struggle to provide adequate insurance coverage. Providing government support in the form of targeted subsidies would help address this healthcare cost chasm, not just for healthcare workers, but across all sectors.

One model, the Service Contract Act, helps midsize businesses with low-income employees by requiring employers to allocate funds for health benefits for government contract employees. Federal funding is provided to these employers in the public procurement sector to help them meet the requirement. A support program for mid-sized businesses in other sectors would strengthen the ability of employers to provide comprehensive and affordable healthcare coverage to employees without risking insolvency.

The country’s aging population, combined with the uncertainty of a future pandemic, underscores the need to protect access to healthcare for essential workers.

As policy makers continue to explore opportunities to build on ACA, they should prioritize solutions focused on the needs of the low-income workforce, especially those providing health care. quality to the masses. &

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