Small Employers and Their Health Benefits, 1988-1996: An Awkward Adolescence

Health Affairs

Volumn 16, Issue 5, 1997, Pages 103-110

  Gabel, Jon R ^a   Ginsburg, Paul B ^b   Hunt, Kelly A ^c  

^a KPMG LLP   (United States)

^b CENTER FOR STUDYING HEALTH SYSTEM CHANGE   (United States)

^c KPMG   (Netherlands)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; COMMERCIAL PHENOMENA; ECONOMICS; HEALTH INSURANCE; HUMAN; STATISTICS; UNITED STATES;

COMMERCE; HEALTH BENEFIT PLANS, EMPLOYEE; HUMANS; UNITED STATES;

EID: 0346042251     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.16.5.103     Document Type: Review

References (14)

1. J.C. Cantor, S.H. Long, and M.S. Marquis, "Private Employment-Based Health Insurance in Ten States," Health Affairs (Summer 1995): 199-211; and J. Gabel et al., "The Health Insurance Picture in 1993: Some Rare Good News," Health Affairs (Spring I 1994): 327-336.
2. J.C. Cantor, S.H. Long, and M.S. Marquis, "Private Employment-Based Health Insurance in Ten States," Health Affairs (Summer 1995): 199-211; and J. Gabel et al., "The Health Insurance Picture in 1993: Some Rare Good News," Health Affairs (Spring I 1994): 327-336.
3. Data are from County Business Patterns, U.S. Department of Commerce, Bureau of the Census (November 1996). Small firms are employers with 249 or fewer workers.
4. P. Fronstin, "Sources of Health Insurance and Characteristics of the Uninsured: Analysis of the March 1996 Current Population Survey," Employee Benefit Research Institute Issue Brief 179 (Washington. EBRI, November 1996), 5.
5. EBRI, "Employment-Based Health Benefits: Analysis of the April 1993 Current Population Survey," EBRI Special Report SR-24 and Issue Brief Number 152 (Washington: EBRI, August 1994), 8; and Fronstin, "Sources of Health Insurance and Characteristics of the Uninsured," 9.
6. EBRI, "Employment-Based Health Benefits: Analysis of the April 1993 Current Population Survey," EBRI Special Report SR-24 and Issue Brief Number 152 (Washington: EBRI, August 1994), 8; and Fronstin, "Sources of Health Insurance and Characteristics of the Uninsured," 9.
7. The 1988 Health Insurance Association of America (HIAA) survey of small employers used a different sample design than either HIAA or KPMG used in subsequent years. A greater proportion of small firms in the 1988 sample employed fewer than ten workers. Consequently, the percentage of small firms in the 1988 sample not offering health insurance is far greater than in later HIAA or KPMG surveys. The use of sampling weights corrects for differences in the sample design between 1988 and other years and yields unbiased estimates of small-employer characteristics for all years.
8. Based on an analysis of KPMG data, Gail Jensen and colleagues found that from 1993 to 1995, small employers experiencing rapid increases in premiums or higher-than-average deductibles were likely to switch from offering only a conventional plan to offering only a managed. care plan. G.A. Jensen et al., "The New Dominance of Managed Care: Insurance Trends in the 1990s," Health Affairs (January/February 1997): 125-136.
9. The differences in 1988 premiums between firms with one to nine employees and all small firms are probably attributable to sampling error.
10. Comparisons of premiums for single coverage are more meaningful than those of premiums for family coverage, so we do not discuss those for family coverage. Most large firms have separate rates for employee/spouse coverage and for family coverage. Many smaller firms blend the employee/spouse coverage with family coverage.
11. Joel Cantor and colleagues note this same pattern in their analysis of 1993 data from ten states-similar premiums between small and large firms but richer benefits for workers at large firms. Cantor et al., "Private Employment-Based Health Insurance in Ten States."
12. To construct a fixed market basket of health plans, we calculated a Fisher index. The Fisher index is the geometric mean of an index using base-year weights and an index using end-year weights.
13. Many small employers, unlike large and mid-size employers, do not understand the concept of self-insurance. In 1988, HIAA asked about self-funding but did not ask a follow-up question intended to screen out erroneous responses. HIAA added the follow-up question in 1989. We believe the absence of the follow-up question resulted in an overestimate of self-insurance among small employers in 1988. Consequently, we present statistics from 1993 rather than 1988.
14. P.B. Ginsburg and J.D. Pickreign, "Tracking Health Care Costs," Health Affairs (Fall 1996): 140-149.