Revisiting Pay or Play: How States Could Expand Employer-Based Coverage Within ERISA Constraints (Briefing Paper) May 2002
Authors: Butler, P, JD, DR.P.H.
Publication Year: 2002
Last Updated: 2010-09-07 14:49:37
Journal: National Academy for State Health Policy
Keywords: pay or play, health insurance, employer coverage, insurance, SCHIP, State Children's Health Insurance Policy
Short Abstract:
The vast majority of insured Americans receive health coverage through the workplace, but over one-third of working people (37 percent) are not covered by their employers. The likelihood of having coverage declines with firm size: only 41 percent of employees in firms with under ten workers receive coverage through their employment compared to 66 percent of employees in firms with 200 or more workers. Some of these workers are offered coverage in which they do not enroll, but most work for firms that do not offer coverage at all. Employers not offering health coverage justify this choice based on cost and/or worker preferences. The problem small businesses experience in affording health coverage has led states to experiment with premium subsidies and other initiatives to make coverage more affordable and therefore more sustainable by employers. But often those subsidies were available only to employers who had not previously offered coverage, creating an uneven playing field with those who had. The enactment of the State Children’s Health Insurance Program (SCHIP) exacerbated the inequity. SCHIP provides funding for children in families with incomes up to 200% FPL (or lower at the state’s option) and requires the program to avoid “crowding out” private coverage. Generally, public funds cannot subsidize children already covered by an employer but can cover children whose parents work for an employer who does not provide insurance.
Abstract:
The vast majority of insured Americans receive health coverage through the workplace, but over one-third of working people (37 percent) are not covered by their employers. The likelihood of having coverage declines with firm size: only 41 percent of employees in firms with under ten workers receive coverage through their employment compared to 66 percent of employees in firms with 200 or more workers. Some of these workers are offered coverage in which they do not enroll, but most work for firms that do not offer coverage at all. Employers not offering health coverage justify this choice based on cost and/or worker preferences. The problem small businesses experience in affording health coverage has led states to experiment with premium subsidies and other initiatives to make coverage more affordable and therefore more sustainable by employers. But often those subsidies were available only to employers who had not previously offered coverage, creating an uneven playing field with those who had. The enactment of the State Children’s Health Insurance Program (SCHIP) exacerbated the inequity. SCHIP provides funding for children in families with incomes up to 200% FPL (or lower at the state’s option) and requires the program to avoid “crowding out” private coverage. Generally, public funds cannot subsidize children already covered by an employer but can cover children whose parents work for an employer who does not provide insurance.
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