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This report includes a summary of key changes, including the salary level test and salary basis test.

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March 14, 2007
Fewer Employers Offer Health Coverage to Lower Income Parents

Employer offers of health insurance to parents with lower incomes have fallen three times as fast as offers to parents who earn more money, according to an analysis published by the Robert Wood Johnson Foundation.

Nationally, 47 percent of parents in families earning less than $40,000 a year are offered health insurance through their employer--a 9 percent drop since 1997. Meanwhile, offers of health insurance to parents in families earning $80,000 or more have held steady at about 78 percent.

The foundation released the report as President Bush, governors, and members of Congress debate how much federal funding to devote to the State Children's Health Insurance Program (SCHIP), which provides states with federal funds to design a health insurance program for vulnerable children.

"For the last decade, SCHIP has provided a much-needed safety net for our nation's kids, especially as there has been a decline in the number of children in low-income families covered by employer-sponsored health insurance," says Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation. "Parents realize that providing health insurance for their children is becoming more costly and those who earn modest wages are doubly squeezed. They are less likely to be offered insurance on the job, and less able to afford to purchase it on their own."

Most uninsured children--including children in low-income homes--have parents who work. Across the nation, 75 percent of uninsured children live with someone who works full-time.

The report was prepared by analysts at the State Health Access Data Assistance Center (SHADAC), located at the University of Minnesota. The report analyzes data from the U.S. Census Bureau (1998-2006 Current Population Surveys), U.S. Centers for Medicare & Medicaid Services (2002-2005), and the U.S. Centers for Disease Control and Prevention's National Health Interview Survey (1997 and 2005).

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