The large majority of American families with health insurance obtain their coverage
through an employer -- whether their own, their spouse's, or a parent's. Indeed, employersponsored
insurance (ESI), which covers nearly 63 percent of Americans, has served as the
foundation for the U.S. health insurance system for half a century.

Throughout the 1980s and early 1990s, however, the percentage of people with ESI declined. And, while ESI rates appear to have stabilized since 1993 -- largely because
of a high-employment economy and the continuing trend toward two-worker families --
the proportion of private sector employees who are insured through their own jobs has
continued to decline. The share of U.S. workers under age 65 with health insurance
through their own employer fell from two-thirds (66%) in 1979 to just over half (54%) in
1998. This decline is particularly disturbing because it affects the major source of health
care financing for employees and their families.

To understand how labor market trends have contributed to the decline in the proportion of private-sector workers receiving benefits from their own employers -- and to anticipate future trends -- this study examines changes over a 19-year period, 1979 to
1998. Current Population Survey (CPS) results for 1979–98 and hourly compensation data from the U.S. Department of Labor were used to gauge the extent of decline across various industry, occupation, and wage groups, as well as to draw implications for the U.S. workforce. The study addresses the following questions:

• To what extent does the decline in "own-employer" health benefits reflect a shift from manufacturing jobs to service industry jobs, or a shift from employment in large firms to small firms?
• Does this pattern hold for both male and female employees, as well as for different age groups?
• How have low- and moderate-wage workers been affected?
• Has the trend had an impact on the inequality of compensation?

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