Firm Size, Location Determines Who Gets Employer-Sponsored Health Insurance

For Release: March 10, 1998

Contact: NCHS Press Office (301) 458-4800,

Employer-Sponsored Health Insurance: State and National Estimates. (PHS) 98-1017 [PDF – 804 KB]

Most Americans get their health insurance through their employer but the availability of employer-sponsored insurance varies greatly from state to state, according to a first-ever Federal survey to produce state estimates.

Findings from the National Employer Health Insurance Survey show that 86 percent of private sector employers in Hawaii offered health insurance, far exceeding that of any other state and more than double the 40 percent reported in Montana.

The survey found that nationwide just over half (52 percent) of private sector employers sponsored group health insurance. By state, the numbers ranged from 86 percent in Hawaii, the only state where employers are mandated to provide health insurance, to 66 percent in the District of Columbia, the area with the next highest rate, to Montana with the lowest rate.

The survey obtained data from over 35,000 businesses, both individual companies and those operating as part of a larger firm, and found that firm size (the number of employees nationwide) was the major reason for variation in employer-sponsored insurance. Large firms were far more likely to offer health insurance. For example, one-third of businesses in firms with less than 10 employees offered insurance compared with 96 percent of businesses in larger firms employing 100 or more persons. This difference by firm size means that while only half of U.S. employers offered insurance those companies employed 83 percent of all workers.

The presence of union employees was also associated with high levels of insurance coverage. Only 52 percent of employers in businesses without union employees offered health insurance compared with 84 percent of companies with a unionized work force. Businesses with a high percentage of low-wage employees were less likely to sponsor health insurance than those with fewer low-wage employees.

The survey also looked at coverage levels and types of plans offered. Four out of five businesses offering health insurance sponsored only one health plan. Businesses that operated as part of large firms were more likely to offer more choice in plans. For example, only 12 percent of companies in firms with less than 50 employees offered two or more plans but one in three in firms with 50 or more employees offered employees a choice of two or more plans.

More than one-half (56 percent) of private businesses sponsoring health insurance offered managed care plans, 26 percent offered a health maintenance organization plan, and 35 percent a preferred provider organization plan. New businesses were more likely to offer a managed care plan than businesses which had been operating longer.

Even when employers offered health insurance, not all employees were eligible, the researchers found. For example, 82 percent of full-time employees were eligible for health benefits compared with only 18 percent of part-time workers.

The National Employer Health Insurance Survey was sponsored by the Department of Health and Human Services and conducted by the National Center for Health Statistics (NCHS), Centers for Disease Control and Prevention, in partnership with the Agency for Health Care Policy and Research and the Health Care Financing Administration. The survey was conducted in 1994 and gathered data on health insurance and employee coverage as of the end of 1993.

The report, “Employer-Sponsored Health Insurance: State and National Estimates,” the first in a series of publications reporting on the survey findings, is available from NCHS and is on the NCHS home page