Implications of ERISA for health benefits and the number of self-funded ERISA plans

This Issue Brief provides an overview of the issues relating to the Employee Retirement Income Security Act of 1974 (ERISA) and health benefit plans, the major case law relating to ERISA and health plans, and the implications of the preemption of state regulations for health plan sponsors and participants. It also presents the latest data on the number of health plan participants in self-funded ERISA plans. Finally, it presents a summary of current legislative proposals that would attempt to amend ERISA. Under the framework ERISA established for employee benefit plans, the regulation of employment-based health benefit plans has evolved into a two-tiered system in which both federal and state laws play important roles. The Supreme Court has interpreted ERISA's "savings" and "deemer" clauses to mean that insured plans are subject to regulations directly at the federal level and indirectly at the state level, while self-funded plans are regulated exclusively at the federal level. The ERISA statute and the courts' interpretations of the Act have created a sharp controversy over how employee health benefit plans are provided and administered, with state regulators and consumer advocates on one side of the debate and plan sponsors (e.g., employers and unions) on the other. State regulators and consumer advocates tend to favor more regulation, and in many instances greater regulation at the state level, which they argue would provide more protections for consumers. However, employers and unions (or any plan sponsors) think ERISA preemption is very important to their ability to provide innovative and cost-effective health benefits for their employees, and assert that ERISA's present structure should be preserved. The U.S. General Accounting Office (GAO) found that 44 million individuals (39 percent of those in ERISA plans) were enrolled in self-funded ERISA plans in 1993, up from 39 million (33 percent of those in ERISA plans) in 1989. The Employee Benefit Research Institute (EBRI), using the same methodology as GAO with 1995 data, estimated that 48 million individuals (39 percent of those in ERISA plans) were enrolled in self-funded ERISA plans in 1995. When policymakers look to amend ERISA, they should consider whether the change to ERISA will produce a higher level of quality for consumers than is being provided under the present system and will continue to do so in the future. Policymakers must also decide whether quality of care is better enhanced by health plans' greater exposure to liability or by market forces. If policymakers decide that increased exposure to liability is the route to go, will consumers be able to enjoy any potential improvement in quality or will more individuals end up uninsured because of increased costs and not be able to get any care regardless of the quality?     

Primary care networks: choose your physicians wisely

As hospitals and health care systems maneuver for a position in the integrated health care delivery system, no initiative is more important than building an effective and competitive primary care network. Yet this critical initiative is fraught with potential pitfalls. In their haste to develop primary care networks, hospitals and health care systems may fail to thoroughly evaluate network participants and in turn create large, inclusive, and inefficient primary care networks that don't come close to breaking even, much less repay practice acquisition costs. In an effort to become more efficient, practitioners often find themselves in the unenviable position of "de-selecting" peers retrospectively. The author presents criteria for evaluating and selecting network physicians.     

Sustainability of family planning and health projects

USAID has assisted the Ghanian Ministry of Health since 1991 to boost family planning services under the Ghana Family Planning and Health Project by providing supplies and information and increasing the effectiveness of HIV/AIDS prevention and control. The sustainability of the health system is endangered by favoring capital expenditures in lieu of continuous expenditures; the lack of linkage between project activities and regular activities; the centralization of resource flow; and too ambitious targeting. Capital outlays provided by USAID featured in the construction of four public health laboratories, but their operation also requires continuous financing amounting to about 10% of the whole investment. The latter is the responsibility of the government, although the details of these recurrent costs were not detailed at the outset and providing these funds for continuous operation may impair the operation of other systems. The resource constraints could be alleviated by an effective cost-recovery system or by the general improvement of the economy. The lack of linkage between project and regular activities is serious at regional and district levels. The centralization of resource flow means that most resources are kept for headquarter level activities, thus other activities suffer and the health sector becomes excessively reliant on donor support. Too ambitious planning stems from pressure on donors and hastily implemented projects result in duplication and waste. Closer consultation with the parties involved would improve the situation. The rivalry of technical and policy groups has contributed to past deficiencies. Double funding for the same activity has also occurred further increasing the dependence on donor funding. By concentration on people and systems sustainability would be enhanced, while cost recovery would help the operation of the laboratories. The Health Education Unit (HEU) recognized the importance of IEC and obtained financing for such activities.     

A problem in household composition

"Distinction made between household-persons and household-markers [the person who identifies the family or household as a unit] is formalized in the notion of nested populations. This leads to an extension of the Leslie model into a formulation of growth for both population and households. The extended model involves the matrix presentation of household composition where ratios of household-persons who are age 0, per household-marker, function as surrogate values for fertility rates. The extended model describes change over time in the distribution of population by age, and in the distribution of households by age of household-marker, or household-head. The model involves the inversion of a nonnegative matrix, and is feasible only if it yields, projected over time, nonnegative entries in vectors representing distribution of population by age, and distribution of household-heads by age. Conditions for the feasibility of the extended model are discussed, and a sufficient condition for feasibility over a single interval is identified." (SUMMARY IN FRE)     

Premarital relationships and livelihoods in Ghana

This study is based on interviews with a sample of 400 single women aged 18-25 years from the Fante ethnic group in Cape Coast, Ghana, in 1991, and on focus groups. This case study illustrates the importance of economic and living arrangement support expected from partners in premarital relationships. Support may be for living and maintenance ('chopmoney', provisions, household items, and rent); for financial security (provision of capital); and for clothing and hairdressing. Women did not always require economic support in premarital relationships. Women expect boyfriends to provide 'chopmoney' (money for food and general upkeep) and contribute some money for the rent. Only 36% of sexually active women expected their boyfriends to supply food provisions. Premarital sexual relationships are used to obtain start-up capital. The author refers to evidence that senior government officials engaged in sexual transactions with clients before loans and credit facilities were offered. 87% of sexually experienced women expected their partners to pay for at least part of clothing expenses. The study revealed that there was considerable disparity between women's expectations and actual receipt of economic support. 56% desired, but only 36% received, 'chopmoney' in full. 40% expected their partners to pay for household furnishings in full, while only 10% did so. 55% expected capital, but only 15% received it. The three most frequently received benefits in full were hair dressing, shoes, and dresses. Men provided most non-negotiable items as a means of "boosting their egos." Many young women rely on the support of men in order to improve their status. Ghanaian men control financial resources and economic power. Mothers of adolescent daughters encourage premarital sexual behavior. Prostitution is considered different from sexual exchange relationships. It is argued that gender inequalities and domestic abuse are perpetuated through sexual exchange relationships.     

Physician organizations. Part 1: A report from the trenches of a start-up PO

How has Community Health Partners, a physician organization based in Kansas City, turned the corner as it rolls into the second year of operation? The biggest indicator is that CHP hammered out the city's first professional risk contracts and the PO has grown from 23 to more than 50 physician member/owners. Looking back, there are at least 10 reasons why CHP made it this far. These are not reasons you learn about in medical school or an MBA program. There is no one-size-fits-all template for building POs. No fixed organizational chart. No neon signs pointing to the best capital partner. Part I explores five reasons for success, such as having a strong board and physician leadership, as well as educating participating physicians about capitation and affiliating with any hospital or payer that really knows how to partner with physicians. Part 2 will focus on five more lessons learned from the trenches of a start up PO.     

The shape of public health policy: the Australian experience

Public health policy is shaped by many factors. A brief historical reflection is given on policy development in Australia to illustrate the various influences on health policy. Medical technology; ethical trade-offs; environmental, social, and political imperatives; popular movements; and changing patterns of disease; as well as market forces have helped to shape Australian contemporary public health policy. These multiple and often competing forces, however, can work against individual consumer choice in health care decisions. This article demonstrates through the eyes of history the factors that shape public health policy. As Australia has a short history compared to most industrialized democratic societies and can be viewed as a microcosm, it is used as the exemplar.     

Breaking the glass ceiling

The glass ceiling is a form of organizational bias and discrimination that prevents qualified professionals from achieving positions of top governance and leadership. This article examines glass ceiling barriers that keep physicians from the upper reaches of management. While these factors apply mainly to women and minority physicians in academia, and are attributable to sexual harassment and discrimination, physicians as a class are frequently denied executive management positions. Such denial results from inadequate preparation for a career in health care administration. Important issues in the professional development of physician executives include mentoring, training and education, administrative experience, and cultural and personality factors. All of those must be considered when making the transition from medicine to management.     

Temporary and illegal labour migration: the Israeli experience

In recent years, Israel has become a major recipient of documented and undocumented temporary labour migrants from many countries outside the Middle East region. The purposes of this article are to describe Israel's experience of temporary labour migration and its concomitant, illegal labour migration; and also to explore what her policies on temporary labour migration indicate about the nature of the policy-making process in this policy domain in Israel.
To these ends the article traces the evolution of temporary labour migration – legal and illegal – and recent policy initiatives of the Israeli government. It then considers some of the major conceptions of the policy-making process found in public policy literature. The article concludes by pointing to the uniqueness of Israel's experience of temporary labour migration and to the fact that her policies have been overwhelmingly reactive – inadequately considered, ill-conceived, ambivalent in relation to their ultimate purpose and, in the course of implementation, vulnerable to "privatization" (being taken over by vested interest groups).
Analysis of the most recent policy initiatives designed to reduce the number of legal labour migrants and address the problem of illegal labour migrants, reflect a policy-making process that is not followed by commensurate action.