Embraceable you: How employers influence health plan enrollment

Health Affairs

Volumn 20, Issue 4, 2001, Pages 196-208

  Gabel, Jon R ^a   Pickreign, Jeremy D ^a   Whitmore, Heidi H ^a   Schoen, Cathy ^b  

^a Health Research and Educational Trust   (United States)

^b Commonwealth Fund ^*  (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; COMPARATIVE STUDY; CONSUMER; COST; HEALTH INSURANCE; INFORMATION PROCESSING; INSURANCE; MULTIVARIATE ANALYSIS; ORGANIZATION AND MANAGEMENT; PERSONNEL MANAGEMENT; POLICY; STATISTICS; UNITED STATES; UTILIZATION REVIEW;

CONSUMER PARTICIPATION; DATA COLLECTION; DEDUCTIBLES AND COINSURANCE; ELIGIBILITY DETERMINATION; EMPLOYEE INCENTIVE PLANS; HEALTH BENEFIT PLANS, EMPLOYEE; INSURANCE COVERAGE; MULTIVARIATE ANALYSIS; ORGANIZATIONAL POLICY; UNITED STATES;

EID: 2442453863     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.20.4.196     Document Type: Article

References (29)

1. U.S. Bureau of Labor Statistics, <146.142.4.24/cgi-bin/surveymost> (12 January 2000).
2. P. Fronstin, Sources of Health Insurance Coverage and Characteristics of the Uninsured: Analysis of the March 1999 Current Population Survey, EBRI Issue Brief no. 217 (Washington: Employee Benefit Research Institute, January 2000).
3. U.S. Census Bureau, "Health Insurance Coverage: 1999," 10 October 2000, 〈www.census.gov/hhes/hlthins/hlthin99/hi99ta.html〉 (12 April 2001).
4. P.F. Cooper and B.S. Schone, "More Offers, Fewer Takers for Employment-Based Health Insurance: 1987 and 1996," Health Affairs (Nov/Dec 1997): 142-149.
5. For example, see S.H. Long and M.S. Marquis, "Gaps in Employer Coverage: Lack of Supply or Lack of Demand?" Health Affairs (Supplement 1993): 282-293; and K.E. Thorpe and C.S. Florence, "Why Are Workers Uninsured? Employer-Sponsored Health Insurance in 1997," Health Affairs (Mar/Apr 1999): 213-218.
6. For example, see S.H. Long and M.S. Marquis, "Gaps in Employer Coverage: Lack of Supply or Lack of Demand?" Health Affairs (Supplement 1993): 282-293; and K.E. Thorpe and C.S. Florence, "Why Are Workers Uninsured? Employer-Sponsored Health Insurance in 1997," Health Affairs (Mar/Apr 1999): 213-218.
7. Because the eligibility rate may affect the take-up rate, we used Heckman's Lambda to control for possible selection effects in this multivariate analysis. See Note 17.
8. See L. Levitt et al., Employer Health Benefits 1999 (Menlo Park, Calif.: Kaiser Family Foundation, and Chicago: Health Research and Educational Trust, 1999), 30-32. The full sample for calculating the percentage of firms offering coverage is based on 1,939 firms that completed the questionnaire and 755 that answered one question, "Does your firm provide health benefits to your employees?"
9. Low-earning firms are defined as firms in which 35 percent or more of the workers earn less than $20,000 per year. High-earning firms are firms in which 20 percent or more of workers earn $75,000 or more a year.
10. The survey did not collect data on the percentage of the workforce belonging to unions, one potential influence on eligibility and take-up rates.
11. For example, firms that said they "encouraged" participation in their health plan on average required higher contributions for premiums than did firms that said they "discouraged" participation.
12. Bureau of Labor Statistics, Report on the American Workforce, Table 11, (12 April 2001).
13. Presumably, employers did not consider contract workers as temporary workers. The question was not clear in distinguishing the two.
14. The median for part-time workers is twenty, which indicates that a few firms have much higher requirements.
15. We use the lowest monthly contribution for single coverage because we believe that this is the statistic that potential "decliners" examine. Those who are sensitive to the contribution rate may accept single rather than family coverage.
16. T. Rice, K. Desmond, and N. Pourat, "Dark Clouds in Pleasantville: Trends in Job-Based Health Insurance, 1996-1998" (Presentation at the Association of Health Services Research annual meeting, Chicago, June 1999).
17. Benefits include adult periodic physical exams, well-baby care, all reversible contraceptives, prenatal care, mammography screening, abortion services, oral contraceptives, outpatient mental health care, inpatient mental health care, chiropractic care, prescription drugs, and infertility treatments.
18. We used the Heckman's Lambda technique to control for potential selection effects. Our reasoning was that eligibility criteria may affect the take-up rate. Firms with more stringent eligibility standards may exclude employees who are less likely to participate in the health plan. Heckman's Lambda is an attempt to enter the effect of eligibility requirements as a control variable in the take-up equation.
19. The multiple r squared for the eligibility equation was 0.33 and for the take-up equation was 0.27. The overall regressions were statistically significant at an alpha of .000. Details of the multivariate anlaysis are available from Jon Gabel, .
20. Our explanation for this counterintuitive result is that firms that do not cover part-time workers hire fewer part-time workers.
21. Former workers pay 102 percent of the monthly cost of premiums under COBRA. However, numerous studies have found that COBRA enrollees incur claims expenses that are considerably greater than the premium contribution. Hence, employers are in fact contributing to the coverage of COBRA enrollees.
22. M. Morrisey, Price Sensitivity in Health Care: Implications for Health Care Policy (Washington: NFIB Foundation, 1992), 40-45; R. Feldman et al., "The Demand for Employment-Based Health Insurance Plans," Journal of Human Resources (Winter 1989): 115-142; and P. Short and A. Taylor, "Premiums, Benefits, and Employee Choice of Health Options," Journal of Health Economics (December 1989): 293-312.
23. M. Morrisey, Price Sensitivity in Health Care: Implications for Health Care Policy (Washington: NFIB Foundation, 1992), 40-45; R. Feldman et al., "The Demand for Employment-Based Health Insurance Plans," Journal of Human Resources (Winter 1989): 115-142; and P. Short and A. Taylor, "Premiums, Benefits, and Employee Choice of Health Options," Journal of Health Economics (December 1989): 293-312.
24. M. Morrisey, Price Sensitivity in Health Care: Implications for Health Care Policy (Washington: NFIB Foundation, 1992), 40-45; R. Feldman et al., "The Demand for Employment-Based Health Insurance Plans," Journal of Human Resources (Winter 1989): 115-142; and P. Short and A. Taylor, "Premiums, Benefits, and Employee Choice of Health Options," Journal of Health Economics (December 1989): 293-312.
25. T. Buchmueller and P. Feldstein, "The Effect of Price on Switching among Health Plans," Journal of Health Economics (April 1997): 231-247.
26. K.A. Hunt et al., "Paying More Twice: When Employers Subsidize Higher-Cost Health Plans," Health Affairs (Nov/Dec 1997): 150-156.
27. Critics of competition-based approaches to cost control identify risk selection as a major flaw with this strategy.
28. Levitt et al., Employer Health Benefits 1999.
29. J. Gabel et al., "Job-Based Health Insurance in 2000: Premiums Rise Sharply while Coverage Grows," Health Affairs (Sep/Oct 2000): 144-151.