Agency for Healthcare 

Medical Expenditure Panel Survey Research and Quality 

STATISTICAL BRIEF #49 

July 2004 

Enrollment Rates for EmployerSponsored Health Insurance in the 

Private Sector between 1999 and 2002 

John Sommers, PhD 

Introduction 

While the percentage of workers covered by employer-sponsored 

health insurance has declined in recent years, such insurance 

continues to be one of the primary sources of health coverage in the 

United States. According to data from the Insurance Component of 

the 2002 Medical Expenditure Panel Survey (MEPS-IC), 55.1 

percent of private sector employees were enrolled in health insurance sponsored by their employer. As recently as 1999, 57.6 

percent of all private sector employees were enrolled in health 

insurance sponsored by their employer. 

Using data from the 1999 and 2002 MEPS-IC, this Statistical Brief 

examines the changes among current workers in offer, eligibility, and 

enrollment rates across small (less than 50 employees), medium (50 

to 999 employees ), and large firms (1,000 or more employees) to 

provide a clearer picture of this decline in the percentage of employees who participated in employer-sponsored health insurance. 

General differences in rates by size of firm, such as the lower percentage of employees in small firms than in large firms who work 

where health insurance is offered, are shown in the figures but not 

discussed in this brief. The key focus is on the change within groups 

of firms between 1999 and 2002. Only those differences that are 

statistically significant at the 0.05 significance level are discussed in 

the text. 

Findings 

From 1999 to 2002, the percentage of all employees in the private 

sector enrolled in employer-sponsored health insurance dropped 

from 57.6 to 55.1 percent (figure 1). Both small and medium firms 

showed significant drops in overall enrollment rates. The former 

dropped from 43.0 percent to 38.9 percent, and the latter dropped 

from 60.0 percent to 56.1 percent (figure 1). 

Three factors influence the overall enrollment rate in employersponsored health insurance. The first is the percentage of employees who work where health insurance is offered. For all firms, this 

rate fell from 89.1 percent to 88.3 percent between 1999 and 2002 

Highlights 

� There was a general decline 

in all measures of coverage 

for employer-sponsored 

health insurance among 

current workers in the private 

sector between 1999 and 

2002. The percentages of 

employees who worked 

where health insurance was 

offered, those eligible who 

worked where health insurance was offered, and 

those eligible who enrolled 

were generally lower in 2002 

than in 1999 for small, 

medium, and large firms. 

� The overall enrollment rate in 

the private sector dropped 

significantly from 57.6 percent in 1999 to 55.1 percent 

in 2002. Of the three sizes of 

firms, only the large firms did 

not have a significant drop in 

the overall enrollment rate. 

� Of particular note was a large 

decrease in the percentage 

of employees in small firms 

who worked where health 

insurance was offered: 67.6 

percent in 1999 versus 63.5 

percent in 2002. Over the 

same time period, the percentage of eligible employees who enrolled at small 

firms decreased from 80.5 

percent to 78.5 percent. 

� In medium firms, there was 

also a significant decrease 

from 77.1 percent to 74.5 

percent in the percentage of 

employees eligible for health 

insurance where it was 

offered. 
(figure 2). Small firms showed the largest drop, from 67.6 percent in 1999 to 63.5 percent in 2002 (figure 

2). 

The second factor that makes up the overall enrollment rate is the percentage of employees eligible for 

health insurance among those who work at firms where insurance is offered. This rate for all firms was 

77.1 percent in 2002 (figure 3), which was not a significant drop from 1999. The change in eligibility rates 

from 1999 to 2002 among employees at medium firms was significant. In this group of firms, this rate 

dropped from 77.1 percent to 74.5 percent (figure 3) over the time period. 

The third factor reflected in the overall coverage rate is the percentage of eligible employees who enroll in 

health insurance at firms that offer health insurance. The enrollment rate across all firms dropped from 

82.3 percent in 1999 to 81.0 percent in 2002 (figure 4). Among the different firm sizes, the rate of 

enrollment for eligible employees dropped significantly for small firms. The rate in 2002 was 78.5 percent, 

down from 80.5 percent in 1999 (figure 4). 

Data Source 

This Statistical Brief summarizes data from the 1999 and 2002 MEPS-IC. The data are available on the 

MEPS Web site (http://www.meps.ahrq.gov/) or have been produced using special computation runs 

on the confidential MEPS-IC data available at the U.S. Bureau of the Census. 

Definitions 

In this Statistical Brief, an employer is defined as a private sector firm. A firm is defined as a business 

entity that controls one or more business establishments or locations. Thus, an employer can have 

multiple work locations. A large multi-location auto maker is an employer and a single production plant is 

not. 

About MEPS-IC 

MEPS-IC is a survey of business establishments and governments that collects information on employersponsored health insurance, such as whether insurance is offered, enrollments, types of plans, and 

premiums. The survey is conducted annually by the U.S. Bureau of the Census under the sponsorship of 

the Agency for Healthcare Research and Quality. The yearly response rate has averaged 78 percent for 

in-scope sample units. Approximately 4 percent of the original sample has been out-of-scope in a typical 

year. A total sample of 42,000 establishments was selected for the 2002 survey, prior to accounting for 

losses due to non-response and out-of-scope cases. 

For more information on MEPS-IC, see MEPS Methodology Reports 6, 8, and 10 under MEPS publications

at http://www.meps.ahrq.gov/mepsweb/data_stats/publications.jsp and the MEPS-IC Technical Appendix

at http://www.meps.ahrq.gov/mepsweb/survey_comp/ic_technical_notes.jsp.

Suggested Citation 

Sommers, J. Enrollment Rates for Employer-Sponsored Health Insurance in the Private Sector between 

1999 and 2002. Statistical Brief #49. July 2004. Agency for Healthcare Research and Quality, Rockville, 

MD. http://www.meps.ahrq.gov/papers/st49/stat49.htm 
Expenditure Panel Survey, 1999 and 2002 

Figure 1. Percentage of all private sector employees who were 

1999 and 2002 

38.9 

43.0 

56.1 

60.0 

65.9 64.4 

55.1 57.6 

0 

10 

20 

30 

40 

50 

60 

70 

1999 2002 

Small Firms Medium Firms Large Firms National Average 

Percent 

Source: Center for Financing, Access, and Cost Trends, AHRQ, Insurance Component of the Medical 

enrolled in employer-sponsored health insurance, by size of firm, 

Expenditure Panel Survey, 1999 and 2002 

1999 and 2002 

63.5

67.6 

94.9 96.0 99.6 99.4

89.1 88.3

0 

20 

40 

60 

80 

100 

1999 2002 

Small Firms Medium Firms Large Firms National Average 

Percent 

Source: Center for Financing, Access, and Cost Trends, AHRQ, Insurance Component of the Medical 

Figure 2. Percentage of all private sector employees who worked where 

employer-sponsored health insurance was offered, by size of firm, 
Expenditure Panel Survey, 1999 and 2002 

Figure 3. Percentage of all private sector employees who were 

1999 and 2002 

77.1 

78.0 

79.1 

74.5 

78.1 

79.1 

77.1 

78.5 

70 

75 

80 

1999 2002 

Small Firms Medium Firms Large Firms National Average

Percent 

Source: Center for Financing, Access, and Cost Trends, AHRQ, Insurance Component of the Medical 

eligible for employer-sponsored health insurance, by size of firm, 

Expenditure Panel Survey, 1999 and 2002 

Figure 4. Percentage of all private sector employees who were 

by size of firm, 1999 and 2002 

80.5 

78.5 

81.1 

79.3 

82.3 

81.0 

83.7 

82.9 

75 

80 

85 

1999 2002 

Small Firms Medium Firms Large Firms National Average 

Percent 

Source: Center for Financing, Access, and Cost Trends, AHRQ, Insurance Component of the Medical 

eligible for employer-sponsored health insurance who were enrolled,