This report describes the decline in employer-based health coverage between 1989 and 1996 and the underlying causes of that decline--including rapidly rising worker premiums and other economic variables. The analysis combines data from a variety of sources, including the U.S. Census Bureau's Current Population Survey, the National Medical Expenditures Survey for workers with employer coverage, and annual KPMG Peat Marwick Surveys. The authors employed regression analysis to determine the relative importance of economic factors on an individual's probability of having employer-based coverage--as either a worker or dependent. In addition to providing a basis for measuring the impact of various factors on the level of coverage of workers and dependents during the 1989 to 1996 period, these models also allowed projection of coverage levels in future years under alternative assumptions about premium growth, employee contribution shares, and other economic factors.