Dec 8, 2020 - Axios Events

Most employers didn't pay furloughed workers' health care premiums

Data: Bureau of Labor Statistics; Chart: Andrew Witherspoon/Axios
Data: Bureau of Labor Statistics; Chart: Andrew Witherspoon/Axios

When the coronavirus forced businesses to tell their employees not to work, most kept paying at least some of those workers' wages — but not their health insurance premiums.

Why it matters: Millions of people have lost their income and their health care coverage at the same time during this pandemic, which could stick them with unaffordable medical bills or cause them to put off care they need.

The big picture: Nationwide, 52% of businesses told employees not to work at some point this year because of the pandemic, according to data from the Bureau of Labor Statistics.

  • In the spring, for example, many restaurants and retail stores didn't fire or lay off their workers, but employees were simply unable to go to work because those businesses were closed or operating with only a skeletal staff.

By the numbers: Of the companies that told some employees not to work, most — 51% — kept paying at least some of those workers.

  • But only 42% of those businesses kept paying those workers' health insurance premiums, according to the BLS data.
  • The industries hit hardest by the economic downturn — the ones where workers were most likely to have their hours cut or eliminated — were the least likely to keep paying health care costs..

Between the lines: The average employer-based health care plan in the U.S. costs about $7,000 per year for an individual and $20,000 for a family. Employers, not workers, pay the bulk of those premiums.

  • That's a big, fixed expense that simply may not be sustainable for many employers in this economy — even ones that could afford to keep some of their workers' wages flowing.

The bottom line: Tying insurance coverage to employment leaves people in a lurch whenever the economy turns south.

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