The Affordable Care Act has a lot of work to do to get Americans more employer-based health coverage, particularly those working for small companies.

Three years after the ACA’s enactment and on the eve of the employer and individual mandates kicking in, the long-term declining rate of employee coverage was in full swing – particularly among employers with less than 50 employees.

That pattern is examined on a state-by-state basis in a study released today by the State Health Access Data Assistance Center. The study pinpoints patterns of change in employee health coverage based on averages of two-year periods prior to the “great recession” (2004-2005), the two years that encompassed it (2008-2009), and a post-recession period (2012-2013).

Also see: 10 states with the highest uninsured rates post-ACA

One conclusion of the study is that patterns in health coverage need to be examined through the lens of economic conditions, geography and, of course, employer size, says Julie Sonier, lead author of the report.

For example, according to the report, the percentage of employees working for employers with at least 50 employees who have the opportunity to receive health benefits remained high and essentially unchanged between 2004 and 2013, at a surprisingly high 96%. (Data for the study comes from the “Medical Expenditure Panel Survey-Insurance Companies,” sponsored by the U.S. Department of Health and Human Services.)

Small employer coverage erosion

Availability of health coverage to employees working at companies with fewer than 50 employees, however, dropped substantially, to 35% in 2013 from 56% in 2004. Since the ACA’s employer “shared responsibility” provision does not extend to that employer size bracket, the future direction of that pattern is unclear.

Health benefit availability at small employers also showed more variability in coverage prevalence on a state-by-state basis than larger employers. For example, in 2013 only 22% of employees at small employers in Alaska, and 25% of them in Arizona, could receive coverage.

In contrast, 49% of workers at small employers in the District of Columbia and 47% in Massachusetts, had the opportunity to access sponsored plans. (Most small employers in Hawaii are required to offer coverage, resulting in a 78% offer rate there.)

Also see: 10 states with the lowest uninsured rates post-ACA

The report makes an important distinction between the percentage of employees working at companies with health plans, and those employees who are actually eligible for coverage. Predictably, a much lower percentage (31%) of part-time employees at employers with health plans were eligible during the 2012-2013 period to obtain health coverage, than full-time workers (89%).

Offering vs. taking benefits

Also, eligibility for health benefits is not the same as electing to receive health benefits (called by the report’s authors as the take-up rate). Employer size did not seem to influence take-up rates for full-time employees. For example, in 2013 74% of employees at small firms seized the chance to enroll in a health plan, and 76% did so at large employers.

A downward trend in take-up over time was evident in both size categories for full-time workers. The uptake rate for small employers drifted from 78% in 2004 to 74% in 2012-2013. Those numbers were 80% and 76%, respectively, at large employers.

The overall take-up rate among part-time workers has dropped more substantially, from 52% to 42% over that period.

Also see: ACA costs federal government less than anticipated

Take-up rates for part-time employees varies considerably at the state level. Poorer states, such as Alabama, Arkansas, Mississippi and Texas, for example, all had take-up rates below 30%. States with take-up rates at or above 50% were California, Colorado, Hawaii, Oregon, Pennsylvania, and Washington.

However, assuming ACA’s individual mandate isn’t invalidated by federal courts considering Constitutional challenges to that ACA provision, the take-up rates of all employees is likely to increase as the size of the penalty for not having coverage rises.

Richard Stolz is a freelance writer based in Rockville, Md.

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