Portability of health insurance: COBRA expansions and small group market reform

Proposals are currently being put forth to change the health care system incrementally. One area of proposed legislation addresses portability, which allows an individual to change insurers without being subjected to a new waiting period for preexisting conditions. These proposals, discussed in this Issue Brief, contain provisions to limit preexisting condition exclusions, guarantee access to health insurance, guarantee renewal of health insurance, allow individuals to contribute to medical savings accounts on a pretax basis, and change the current law under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The proposals would affect insurers, employers, and insured individuals by potentially increasing the cost of providing and purchasing health insurance. Concern about the portability of health insurance primarily arises in situations where an individual is leaving, or would like to leave, a job. If health insurance is not offered by a prospective employer, if the worker must satisfy a waiting period before becoming eligible for coverage, if the benefits package offered through the prospective employer is less generous, or if the employee (or a dependent) has a medical condition that is considered a preexisting condition and would not be covered by the new plan, the employee may opt to remain with his or her current employer--a situation known as job lock. Expansions of COBRA may not have any effect on portability. Employers can charge up to 102 percent of the premium for COBRA coverage, making it unaffordable for many workers. Because cost is a major factor, if there is no reduction in cost (or health care cost inflation) there could be little or no increase in coverage. According to one survey, in 1994 average COBRA costs were $5,301 per COBRA covered worker, compared with $3,420 for active employees. Any expansion of COBRA would almost certainly increase employer cost for health insurance.(ABSTRACT TRUNCATED AT 400 WORDS)     

Small employers and health benefits: findings from the 2000 Small Employer Health Benefits Survey

Many small employers (between two and 50 workers) are making decisions about whether to offer health benefits to their workers without being fully aware of the tax advantages that can make this benefit more affordable. Fifty-seven percent of small employers did not know that they can deduct 100 percent of their health insurance premiums. Nearly one-half of small employers are not aware that workers who purchase health insurance on their own generally cannot deduct 100 percent of their health insurance premiums. Small employers are largely unaware of the laws that have been enacted by nearly all states and the federal government with the intent of making health insurance more accessible and more affordable for many small employers. More than 60 percent did not know that insurers may not deny health insurance coverage to small employers even when the health status of their workers is poor. Most employers offer sound business reasons for offering health benefits to workers. Many have found that it helps with employee recruitment and retention, increases productivity, and reduces absenteeism. Nearly 50 percent of the employers offering dependent (family) coverage report that the workers do not take coverage for their dependents because the dependents have coverage from somewhere else. Twenty-seven percent report their employees decline dependent coverage because they cannot afford the premiums. Many small employers that do not offer health benefits are potential purchasers. Twelve percent are either extremely or very likely to start offering health benefits in the next two years, and 17 percent are somewhat likely to start offering health benefits. A number of factors would increase the likelihood that a small business would seriously consider offering a health benefits plan. Two-thirds of small-business owners said they would seriously consider offering health benefits if the government provided assistance with premiums. Almost one-half would consider doing so if insurance costs fell 10 percent. In addition, one-half would be more likely to seriously consider offering a health benefits plan if employees demand it. Many small employers with health benefits have recently switched health plans, and 34 percent report that they did so within the past year. Affordability for the employer and the worker is clearly a critical factor affecting the likelihood of switching health plans. Nearly all employers who have switched health plans within the past five years cite cost as the main reason. One-third of companies offering health benefits think they will change coverage, and 5 percent think they would drop coverage if the cost of health insurance were to increase by 5 percent.     

Issues in mental health care benefits: the costs of mental health parity

This Issue Brief discusses issues in mental health care benefits. It describes the current state of employment-based mental health benefits and discusses studies and issues regarding full mental health parity. It also includes an analysis of the effect of full mental parity on the uninsured population and the effects of the limited mental health parity provision contained in the VA-HUD appropriations bill. The final section discusses the implications of mental health parity for health plans and health insurers. When employers began to provide health insurance benefits to their employees and their families, they extended coverage to include mental health benefits under the same terms as other health care services. Many employers continued to add mental health benefits through the 1970s and early 1980s until cost pressures required employers to re-examine all health care benefits that were offered. They quickly found that, while only a small proportion of the beneficiaries used mental health care services, the costs associated with this care were very high. As a result, employers placed limits on mental health benefits in an attempt to make the insurance risk more manageable. The general strategies employers have used to manage their health care costs are cost sharing, utilization review, managed care, and the packaging of provider services. Employers' cost management strategies may be restricted, however. Five states have mental health parity laws, but three of the states--Rhode Island, Maine, and New Hampshire--apply these laws only to the seriously mentally ill. In addition, 31 states mandate that mental health benefits be provided. However, state mandates apply only to insured plans, not to self-insured employer plans, which are exempt from state regulation of health plans under the Employee Retirement Income Security Act of 1974 (ERISA). A number of recent studies have examined the effect of mental health parity on health insurance premiums in a "typical" preferred provider organization and on the uninsured. In general, the studies concluded that mental health parity could increase health insurance premiums, decrease health insurance coverage for non-mental health related illnesses, and increase the number of uninsured individuals. All studies of mental health parity, and mandated benefits in general, assume that there is a strong likelihood that increased health benefit costs would be passed along to workers in the form of higher cost sharing for health insurance, lower wage growth, or lower growth in other employee benefits.     

Small employers and health benefits: findings from the 2002 small employer health benefits survey

Overall, 19 percent of small employers offering health benefits made changes to their health plan between 2001 and 2002. Sixty-five percent increased deductibles and co-pays; 35 percent switched insurers; 30 percent increased the employee share of the premium; and 29 percent cut back on the scope of benefits. Twenty-six percent increased the scope of benefits offered. Nearly one-quarter of small employers offering health benefits think their firm would change coverage and 3 percent think it would drop coverage if the cost were to increase an additional 5 percent. Most small employers offer sound business reasons for offering health benefits to workers. Many report that it helps with employee recruitment and retention, and increases productivity. More than three-quarters report that offering health benefits is "the right thing to do." Most small employers that do offer health benefits report that it has a positive impact on various aspects of the business, such as recruitment, retention, employee attitude and performance, employee health status, and the overall success of the business. Most small employers that do not offer health benefits tend to think that not offering them has no negative impact on the above aspects of their business or the overall success of the business. However, those not offering benefits are more likely than those offering them to report that most of their employees are high-turnover and stay on the job only a few months. Small employers that offer health benefits tend to be distinctly different from those not offering them. Worker income in firms not offering health benefits tends to be considerably lower than in firms that do offer them. Employers not offering health benefits are more likely than those offering them to have a smaller proportion of full-time employees, and employers that do not offer health benefits have a larger proportion of females, workers under age 30, and minority employees. Of small employers that offer dependent coverage, more than 40 percent report that workers do not take coverage for their dependents because the dependents have coverage from somewhere else, but 35 percent report that employees decline dependent coverage because they cannot afford the premiums. Many small employers that do not offer health benefits are potential purchasers. Eleven percent are either extremely or very likely to start offering health benefits in the next two years, and 22 percent are somewhat likely to start offering health benefits.     

Employment-based health benefits: analysis of the April 1993 Current Population Survey

The April 1993 CPS differs from the March 1993 CPS in a number of respects. The April 1993 CPS supplement surveys only workers, whereas the March CPS examines the noncash benefits received by all Americans. The April CPS asks workers about health coverage in the week in which the questions were fielded, whereas the March CPS asks about coverage in the preceding year. In April 1993, there were 112.5 million civilian American workers between the ages of 18 and 64 with jobs. Eighty-two million (73 percent) of them worked for an employer that sponsored a health insurance plan, and 65 million (58 percent of all workers) participated in their employer's health plan. About one-third of workers at firms with fewer than 10 employees had employers who offer health benefits; about one-quarter of all of the workers in these firms participated in their employer's plan. Conversely, 94 percent of workers at firms with more than 1,000 employees had an employer who sponsored health benefits, and over 77 percent of these workers participated in their employer's plan. There are 16.5 million American workers whose employers sponsored health benefits but who did not participate in these benefits. Over one-half of these workers (8.5 million) chose not to be covered. Another 36 percent of these workers (5.9 million) did not participate because they were ineligible or denied coverage. Over 66 percent of the ineligible workers did not participate because they were part-time, contract, or temporary workers. Another 26 percent had not yet completed a probationary period. Among the reasons that those who chose not to participate in their employer's coverage, the vast majority (75 percent) stated they were covered by another health care plan. Twenty-nine percent stated that they chose not to purchase coverage because it was too costly or that they did not need or want the coverage. In 1993, there were 16.7 million workers with no health insurance coverage. The vast majority of these workers (95 percent) were employed by private employers. Sixty-six percent of the workers with no health insurance coverage were self-employed or worked for firms with fewer than 100 employees.     

Defined contribution health benefits

This Issue Brief discusses the emerging issue of "defined contribution" (DC) health benefits. The term "defined contribution" is used to describe a wide variety of approaches to the provision of health benefits, all of which have in common a shift in the responsibility for payment and selection of health care services from employers to employees. DC health benefits often are mentioned in the context of enabling employers to control their outlay for health benefits by avoiding increases in health care costs. DC health benefits may also shift responsibility for choosing a health plan and the associated risks of choosing a plan from employers to employees. There are three primary reasons why some employers currently are considering some sort of DC approach. First, they are once again looking for ways to keep their health care cost increases in line with overall inflation. Second, some employers are concerned that the public "backlash" against managed care will result in new legislation, regulations, and litigation that will further increase their health care costs if they do not distance themselves from health care decisions. Third, employers have modified not only most employee benefit plans, but labor market practices in general, by giving workers more choice, control, and flexibility. DC-type health benefits have existed as cafeteria plans since the 1980s. A cafeteria plan gives each employee the opportunity to determine the allocation of his or her total compensation (within employer-defined limits) among various employee benefits (primarily retirement or health). Most types of DC health benefits currently being discussed could be provided within the existing employment-based health insurance system, with or without the use of cafeteria plans. They could also allow employees to purchase health insurance directly from insurers, or they could drive new technologies and new forms of risk pooling through which health care services are provided and financed. DC health benefits differ from DC retirement plans. Under a DC health plan, employees may face different premiums based on their personal health risk and perhaps other factors such as age and geographic location. Their ability to afford health insurance may depend on how premiums are regulated by the state and how much money their employer provides. In contrast, under a DC retirement plan, employers' contributions are based on the same percentage of income for all employees, but employees are not subject to paying different prices for the same investment.     

Medicare on life support: will it survive?

This Issue Brief discusses Medicare reform. The Balanced Budget Act of 1997 reduces spending in the Medicare program by $115 billion between 1998 and 2002. Most of the reduction in spending comes from reducing payments to providers, and most of the savings (36 percent) occur in 2002. By 2007, the Part A trust fund is expected to be insolvent, four years before the baby-boom generation reaches the current Medicare eligibility age of 65. Congress is likely to revisit Medicare reform in the near future. A number of reforms received a significant amount of attention during the Medicare reform debate, but were not included in the final legislation. The Senate-passed legislation would have increased the Medicare eligibility age from 65 to 67, imposed means testing on Medicare Part B, and imposed a Part B home health copayment of $5. While these provisions were not included in the Balanced Budget Act of 1997, they may be the focal point of future Medicare reform. Many changes to the Medicare program are likely to significantly affect employment-based health plans for both active and retired workers. Raising the Medicare eligibility age would undoubtedly affect both workers and retirees. Unless workers are willing to work until age 67, their likelihood of becoming uninsured would increase. In 1995, 15.8 percent of retirees ages 55-64 were uninsured, compared with 11.5 percent of workers in the same age group. Early retirees might also find themselves unable to afford health insurance in the private market. An Employee Benefit Research Institute/Gallup poll indicates a direct link between the availability of retiree health benefits and a worker's decision to retire early. In 1993, 61 percent of workers reported that they would not retire before becoming eligible for Medicare if their employer did not provide retiree health benefits. If workers responded to an increase in the retirement age by working longer, employment-based health plans would probably experience an increase in costs, because older workers are the most costly to cover. Some employers might respond to an increase in the Medicare eligibility age by dropping coverage altogether. The message for future beneficiaries is becoming very clear: expect less from Medicare at later ages and higher premiums. As was true prior to the enactment of Medicare in 1965, workers will increasingly need to include retiree health insurance as an expected expense as they plan and save for retirement.     

Employment-based health benefits: who is offered coverage vs. who takes it

This Issue Brief provides data on employment-based health insurance, with a discussion of recent trends and how sponsorship rates, offer rates, coverage rates, and take-up rates vary for different workers. Other sections examine reasons why workers do not participate in employment-based health plans, alternative sources of health insurance, and uninsured workers. In 1997, 83 percent of the 108.1 million wage and salary workers in the United States were employed by a firm that sponsored a health plan. Of those workers, 75 percent were offered coverage, and 62 percent (or 67.5 million workers) were covered by that plan. Of those workers who worked for an employer that offered them a health plan, 83 percent participated in the plan. Sponsorship rates have barely changed in the last 11 years. In 1988, 83 percent of wage and salary workers reported that their employer sponsored a health plan. This declined slightly to 82 percent in 1993 but had increased to 83 percent by 1997. Offer rates significantly changed between 1988 and 1997. In 1988, 82 percent of workers reported that they were eligible for health insurance through their employer. By 1993, the percentage of eligible workers declined to 74 percent, and it has only slightly increased since then to 75 percent in 1997. In 1997, 40.6 million American workers did not have health insurance through their own job. Forty-five percent of the workers without coverage were employed at a firm where the employer did not provide health insurance to any workers. Thirty-three percent of the workers without coverage were offered coverage but declined it. Twenty-two percent of the workers without coverage were employed in a firm that offered health insurance to some of its workers, but certain workers were not eligible for the health plan. The 13.7 million workers who were offered coverage but declined it gave a number of reasons for doing so. In the majority of cases (61 percent), the worker was covered by another health plan. Of the remainder, 20 percent reported that health insurance was just too costly. Overall, 41 percent of the 40.6 million workers who were not participating in an employment-based health plan through their own employer had coverage through a spouse. However, 42 percent of the 40.6 million workers who declined their employers' health plan or who were not offered health insurance from their employer were uninsured.     

Trends in health insurance coverage

This Issue Brief presents data on trends in health insurance coverage between 1987-1995. In 1995, 70.7 percent of the nonelderly population had private health insurance coverage, compared with 75.9 percent in 1987. During this period, the percentage of the nonelderly population with employment-based health insurance declined from 69.2 percent to 63.8 percent, while the percentage covered by Medicaid program increased from 8.6 percent to 12.5 percent. The percentage of the nonelderly population without any form of health insurance increased from 14.8 percent in 1987 to 17.4 percent, or 40.3 million individuals, in 1995. The percentage of nonelderly Americans with employment-based coverage fell for both individuals with coverage in their own name and those with coverage as dependents. In 1995, 32.7 percent of the nonelderly population had coverage in their own name, compared with 33.8 percent in 1987. Similarly, 31.1 percent of the nonelderly population had employment-based health insurance as dependents in 1995, compared with 35.4 percent in 1987. One of the most important determinants of health insurance coverage is work status and hours of work. While employment-based health insurance received directly from worker's employer decreased between 1987 and 1995 from 66.2 percent of 63.2 percent among full-time workers, the percentage of part-time workers with employment-based health insurance coverage in their own name increased from 17.2 percent to 20.1 percent. The percentage of workers with dependent coverage fell for both full-time and part-time workers, as did the percentage of nonworkers with dependent coverage. Workers in the manufacturing industry are most likely to have employment-based health insurance; they are also the workers most likely to have experienced a decrease in employment-based coverage between 1987 and 1995. In contrast, workers employed in most of the service sectors, experienced an increase in employment-based health insurance, self-employed workers experienced a decrease, and government workers experienced a slight increase. Cost is one of the primary factors contributing to the decline in employment-based health insurance coverage. While health insurance premium cost increases have slowed during the past three years, many health care analysts are predicting an increase in health insurance premiums during the next few years. Inflationary pressure may come from health care providers, health insurers, consumers, and/or policymakers. If inflationary pressure increases health insurance premiums, we are likely to see a continued decline in employment-based health insurance and a subsequent increase in both Medicaid and uninsured populations.     

HOW DOES HEALTH INSURANCE AFFECT WORKERS’ COMPENSATION FILING?

About half of injured workers choose not to file workers' compensation claims. This is thought to result from their use of health insurance instead of workers' compensation. However, the data suggest that insured workers are actually less likely to file than their more vulnerable uninsured counterparts. We found that this relationship emerges as the result of employer characteristics and, in particular, that employers who offer health insurance to employees are more likely to have workers who file claims; this is much more important than the insurance status of workers themselves or fixed worker characteristics. ( JEL I1, J3)     

Sources of health insurance and characteristics of the uninsured: analysis of the March 1997 Current Population Survey

This Issue Brief provides summary data on the insured and uninsured populations in the nation and in each state. It discusses the characteristics most closely related to individuals' health insurance status. Based on EBRI analysis of the March 1997 Current Population Survey, it represents 1996 data--the most recent data available. In 1996, 82.3 percent of nonelderly (under age 65) Americans had private or public health insurance. Seventy-one percent had private insurance, 64 percent through an employment-based plan. Sixteen percent had public health insurance. The percentage of uninsured Americans has been increasing since at least 1987. In 1987, 14.8 percent of the nonelderly population was uninsured, compared with 17.7 percent in 1996. However, the erosion of employment-based health benefits cannot fully explain this increase since 1993. Instead, the decline in public sources of health insurance would partly explain it. It may be that, while the percentage of individuals with employment-based coverage is rising, individuals previously covered by Medicaid and CHAMPUS/CHAMPVA are not being fully absorbed into the employment-based health insurance market. Between 1995 and 1996, the percentage of nonelderly Americans without health insurance coverage increased from 17.4 percent to 17.7 percent. Further examination indicates that children completely accounted for this increase. In 1995, 13.8 percent of children and 19 percent of persons ages 18-64 were uninsured, compared with 14.8 percent of children and 18.9 percent of persons ages 18-64 in 1996. With the recent passage of legislation designed to reduce the number of uninsured children, the next focal point for health care reform could be early retirees and unemployed persons. President Clinton and some members of Congress have expressed an interest in improving access to and affordability of coverage for these groups. Currently, health care cost inflation is at its lowest point in years, but there are signals indicating that it is about to rise above current levels. The federal government's recent announcement that health insurance premiums will rise for federal employees an average of 8.5 percent in 1998 may portend higher future health care costs. Similarly, disappointing earnings announcements from several large insurers because of higher medical costs and lower-than-expected revenues may indicate that health insurance plans will increase premiums. Employment and income play a dominant role in determining an individual's likelihood of having health insurance. Age, gender, firm size, work hours, and industry are also important determinants; however, these variables are also closely linked to employment status and income. Some of the widest variations involve factors that are not always looked at in traditional demographic assessments, such as citizenship. However, variations by race, ethnicity, and citizenship are also closely linked to employment status and income.     

Flexible benefits, choice, and work force diversity

This Issue Brief evaluates the prevalence of flexible benefits plans and their ability to achieve cost management goals and to meet the needs of diverse employee groups. In addition, it examines flexible benefits plans' current legislative and regulatory status and typical plan design features. Sec. 125 of the Internal Revenue Code allows employers to provide employees with a choice among benefits, including moving otherwise taxable cash compensation to the pre-tax purchase of benefits, without requiring them to include the value of the noncash benefits in their adjusted gross income unless they choose taxable options. Although the percentage of full-time employees in medium and large private establishments who are eligible for cafeteria plans has not increased appreciably, the percentage of employees eligible for freestanding flexible spending accounts (FSAs) nearly tripled between 1988 and 1991. Generally, the proportion of employers sponsoring cafeteria plans or FSAs increases with employer size. Recent surveys show that 27 percent of employers with 1,000 or more employees offered choice-making plans in 1991, 48 percent of firms offered health care FSAs, and 54 percent offered dependent care FSAs, either in conjunction with cafeteria plans or as a stand-alone option. Ten percent of full-time employees in private firms employing 100 or more workers were eligible to participate in cafeteria plans in 1991. Only 5 percent of full-time employees in state and local governments and 1 percent of similar employees in small private establishments were eligible for cafeteria plans in 1990. Recent Bureau of Labor Statistics' surveys show that, among full-time employees, 27 percent in private establishments with 100 or more employees, 28 percent in state and local governments, and 6 percent in small private establishments were eligible to participate in freestanding FSAs. In 1992, 21 percent of eligible employees contributed to a health care FSA, and only 3 percent of eligible employees contributed to a dependent care FSA. Contributions to health care FSAs averaged $651, and those to dependent care FSAs averaged $2,959. National health reform could have a significant impact on these plans if the tax treatment of health benefits is changed. Taxation of health benefits in excess of a standard benefits package would fundamentally reduce the ability to use FSAs.     

Employer-sponsored long-term care insurance: best practices for increasing sponsorship

Behind the enthusiasm of policymakers for long-term care (LTC) insurance is the belief that increased ownership of private LTC insurance will reduce the government's future liability for financing the nation's LTC needs, currently projected by the Congressional Budget Office to increase by 2.6 percent annually between 2000 and 2040. Some observers say that sustained economic growth could keep these increased expenditures at the same share of total GDP; others argue that current federal expenditure trends will become unsustainable without large tax increases. The potential of the employer-sponsored group LTC market to stave off a national LTC financing crisis has recently started to receive popular notice in the news media. However, for the potential of the group LTC market to be realized, there must be widespread employer sponsorship of group LTC plans and significant participation levels among eligible employees in these plans. The present analysis of industry data estimates the LTC plan sponsorship rate for all U.S. employers with 10 or more employees at 0.2 percent. The sponsorship rate among large employers is significantly higher (8.7 percent). The greatest growth opportunities are projected to lie in the smaller employer market, because it is enormous and virtually untapped. Nonsponsors cite a variety of barriers to employer sponsorship of LTC plans. For many nonsponsors, the most important obstacles are the intrinsic characteristics of their work forces: employees are too young, transient, part-time, and/or low-income to be suitable for LTC insurance. For many others, lack of awareness and low priority are the primary obstacles. Because group LTC insurance has been widely available for only 10 years, many benefits managers view it as "too new and untested." Prior to the passage of the Health Insurance Portability and Accountability Act (HIPAA), in August 1996, the tax treatment of long-term care insurance premiums was unclear because Congress had not addressed the issue and the Internal Revenue Service had not issued clear guidance. In essence, HIPAA served to clarify the tax status of LTC insurance and establish product criteria for tax qualification. The interventions contained in HIPAA appear to have been insufficient to stimulate coverage growth rates that will meaningfully reduced the future burden on government financing of LTC. Although employment-based LTC insurance appears to be the best mechanism for mass expansion of coverage at affordable rates, the data suggest that employer sponsorship of LTC plans is relatively rare, especially among smaller employers, and that sponsorship rates may not dramatically increase without significant investments in employer education and new incentives.     

LABOR MARKET EFFECTS OF EMPLOYER-PROVIDED HEALTH INSURANCE

This is an experimental study in economics of mandated benefits. Most individuals who have health insurance in the United States obtain it through their employer. Some states require employers to provide insurance to certain types of workers. We used an experimental laboratory to investigate possible effects of alternative health insurance regulations on the competitive labor market performance. We found that mandating the insurance for all workers creates labor market distortions, whereas mandating the insurance only for full-time workers leads to a higher coverage than under no mandate, an increased number of part-time workers, but does not necessarily lower market efficiency. ( JEL C92, I18, J2)     

Questions and answers on health insurance benefit issues

This Issue Brief addresses eight topics in the areas of health insurance and health care costs. Using a question and answer format, the discussion draws largely on EBRI research and the EBRI Databook on Employee Benefits, third edition. In 1993, U.S. expenditures on health care were $884.2 billion, and they are projected to reach $2,173.7 billion by 2005, increasing at a projected average annual rate of 7.8 percent. Health care spending accounted for 13.9 percent of Gross Domestic Product (GDP) in 1993 and is projected to reach 17.9 percent of GDP by 2005. Among the factors contributing to the increase in health care costs are the growth in the number of individuals with traditional reimbursement health insurance coverage, the rapid expansion of technology and treatment options, and demographic factors such as the aging of the population. In 1993, employers, both public and private, spent $235.6 billion on group health insurance, accounting for 6.2 percent of total compensation. Group health insurance is the fastest growing component of total compensation, increasing at an average annual rate of 13.7 percent from 1960 to 1993. An increasing number of employees are required to make a cash contribution to their health insurance plan premium. In 1993, 61 percent of full-time employees in medium and large private establishments who participated in an employee only health insurance plan were required to make a contribution to the premium, up from 27 percent in 1979. In 1993, 185.3 million persons under age 65 had health insurance coverage, while 40.9 million people--or about 18.1 percent of the nonelderly population--received neither private health insurance nor publicly financed health coverage. Of those individuals who had health insurance coverage, 60.8 percent, or 137.4 million persons, received their health insurance through an employment-based plan. In 1993, 15.2 percent of the nonelderly population without health insurance coverage were noncitizens. In six states noncitizens represented a higher proportion of the total uninsured population than individuals in the nation as a whole. An increasing number of employers are self-funding their health insurance plans. In 1994, 74 percent of employers with 500 or more employees self-funded their health insurance plans, up from 63 percent in 1993. An estimated 22 million full-time employees in private industry and state and local governments participated in a self-funded employment-based health insurance plan.(ABSTRACT TRUNCATED AT 400 WORDS)     

The Impact of Job Displacement on Employer Based Health Insurance Coverage

We analyze the effect of job displacement on the probability that employer based health insurance is made available to workers. Using fixed and random effects logit models, we do find that displacement is associated with a lower probability of having access to an employer based health insurance plan. Overall this penalty is quite small (between 2 and 3 percentage points), but it becomes substantial (about 16 percentage points) for displaced workers who have been with the current employer for less than 6 months. While we do not find evidence that the penalty associated with being displaced has worsened in recent years, we do find that employers respond to economic hardship by cutting back on fringe benefits.     

Health Insurance and Risk of Divorce: Does Having Your Own Insurance Matter?

Most American adults under 65 obtain health insurance through their employers or their spouses' employers. The absence of a universal health care system in the United States puts Americans at considerable risk for losing their coverage when transitioning out of jobs or marriages. Scholars have found evidence of reduced job mobility among individuals who are dependent on their employers for health care coverage. In this study, the author found similar relationships between insurance and divorce. She applied the hazard model to married individuals in the longitudinal Survey of Income Program Participation (N = 17,388) and found lower divorce rates among people who were insured through their partners' plans without alternative sources of their own. Furthermore, she found gender differences in the relationship between health care coverage and divorce rates: Insurance‐dependent women had lower rates of divorce than men in similar situations. These findings draw attention to the importance of considering family processes when debating and evaluating health policies.     

Comparing Offers and Take‐ups of Employee Health Insurance across Race,Gender, and Decade*

How often do U.S. employees receive health insurance offers from employers? When offered, how often do they take up their employer‐based health insurance? This article uses the 1992 and 2002 waves of the National Study of the Changing Workforce (NSCW) to investigate changes in access to (offers) and employees electing to accept, take, or purchase their employers’ health insurance plans (take‐ups) among wage and salaried workers. Although much research has studied employee health benefits, little has examined the intersection of gender and race regarding both offers and take‐ups of such benefits. Logistic regression results indicate that offers and take‐ups of personal health benefits declined from 1992 to 2002, net of salient controls. Further analyses demonstrate that these declines did not affect all workers identically. Offers declined somewhat for both women and men among whites and African Americans, but declined more among Hispanic women and men. Among other ethnoracial groups, offers declined the most among men, but increased among comparable women. Take‐ups declined among white men and Hispanic workers. However, white and African American women's take‐ups did not change and among African American men take‐ups increased. We discuss the need to examine gender and race simultaneously and urge researchers to more closely examine changes in health benefit offers and take‐ups.