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?     

International labour migration statistics in Asia: an appraisal

"The present paper attempts a critical review of the data systems of seven major labour-exporting countries--Bangladesh, India, Indonesia, Pakistan, Philippines, Sri Lanka and Thailand--which account for over 90 per cent of labour outflows from Asia....Data...are discussed under separate sections focusing on limitations as well as potential for further exploitation.... For all countries reviewed here, these data significantly understate total labour outflows, and the magnitude of the error seems to vary between countries and reflect both differences relating to the coverage and efficiency of the approval and monitoring procedure. This throws serious doubts on the appropriateness of official outmigration series for cross country comparison. Frequent changes in reporting procedures also make for discrete changes and spurious shifts in data which render trend analysis quite hazardous." (SUMMARY IN FRE AND SPA)     

Bequests as a heir "disciple device."

This paper develops a model ofinter vivos gifts and bequests in a setting of moral hazard and adverse selection. Altruistic parents do not perfectly know how much effort their children make to earn their living, nor do they know their true level of ability.Inter vivos gifts take place prior to the realization of the children's earnings whereas at the moment of bequests, parents do observe them. We show that an optimal transfer policy generally uses a mix ofinter vivos gifts — deemed as more efficient — and bequests — deemed as more redistributive.We are thankful to Allessandro Cigno, Jacques Cremer, Claude d Aspremont and anonymous referees for their comments.Responsible editor: Alessandro Cigno     

Why does cancer cluster?

What do Florida sunbathers, midwestern farmers, rural black men, and Long Island women have in common? They all have higher-than-average risks for certain cancers. Researchers know that cancer clusters are usually caused by several factors. As cancer becomes America's leading cause of death, the public will be keenly interested in sorting out the causes and reducing the risks.     

Income expectations,rural-urban migration and employment in Africa

This article develops a theoretical framework explaining the influence of economic conditions on rural-urban migration in tropical Africa. The model explains the continued process of migration despite high levels of urban unemployment. A lengthy discussion is devoted to short-, intermediate-, and long-term policies for relieving the urban unemployment problem. It is argued that efforts must be made to reduce the differences between the expectation of urban income and real rural income. No one single policy will slow rural-to-urban migration. The author suggests policies that would eliminate factor-price distortions, restrain urban wages, redirect development toward concentrated and comprehensive programs of rural development, resettle and repatriate unemployed urban migrants, and establish capital-goods industries. The capital-goods industries would develop labor-intensive technologies for agriculture and industry. The theoretical model assumes that migrants make decisions about moving on the basis of an expected income and the expectation of an urban job. It is argued that the urban-rural income differences and the probability of securing an urban job determine the rate and extent of rural-urban migration in Africa. If the migrant has a low probability of finding regular wage employment in the short term, but expects the probability to increase over time, the migrant would make a rational decision to migrate. Policies that operate solely on urban labor demand are considered unlikely to reduce urban unemployment. This model better estimates the shadow prices of rural labor.     

Migration and its risks

"This essay applies the theories of Ulrich Beck...to the politics of migration in Germany. In particular, the essay focuses on Beck's notion of the waning influence, indeed even relevancy, of science and scientists regarding postmodern risk phenomena. The essay argues that migration to Germany can be understood as a Beckian risk phenomenon, helping to explain the decreasing influence of social scientists over the politics of migration in the Federal Republic."     

The majority legal status of women in southern Africa: implications for women and families

Women in many countries of southern Africa do not have majority status or have only recently gained this right. Majority status grants individuals adult legal status and the right to bring matters to court, own and administer property, have legal custody of children, and contract for marriage. This article summarizes the legal status of women in Botswana, Lesotho, South Africa, Swaziland, Zambia, and Zimbabwe. Lack of majority status contributes to the ongoing risk of poverty for women and makes them overly dependent on men. Compounding the situation in these countries is the presence of a dual legal system. Improving the situation of women and their families involves targeting changes in the legal system, influencing implementation of laws, educating women about their rights, and giving women needed support to seek their legal rights. The legal status of women must be viewed in the context of historical changes in the economic, educational, political, and cultural developments of society.The research for this paper was conducted during her previous faculty affiliation with the University of Michigan, School of Social Work. Her research interests include the impact of social change on women and families, rural mental health services, and health and mental health linkages. She received her Ph.D. from Rutgers University and her M.S.W. from the Columbia University School of Social Work.Her research interests are gender, work and family, culture and power, social transformations in rural and peri-urban communities, critical education, women and community politics, history of women, family and kinship issues, and community-based program development and evaluation. She received her M.S.W. from Dalhousie University, Halifax.