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Self-insuring employee health benefits
1Research Triangle Institute, NC 27709, USA.
Medical Care Research and Review : MCRR
|November 1, 1995
Summary
Employers choose self-funded health plans to avoid state regulations. Key findings indicate a threshold of approximately 100-200 employees for self-insurance, with union involvement and specific mandates influencing this decision.
Area of Science:
- Health Economics
- Health Policy
- Employee Benefits
Background:
- Self-insured health plans are prevalent for employee benefits.
- These plans can circumvent state-level insurance regulations, posing challenges for reform initiatives.
- Understanding employer motivations for self-insuring is crucial for policy development.
Purpose of the Study:
- To test an explanatory model of employer self-insurance for health benefits.
- To identify factors influencing the decision of employers to self-insure.
- To analyze the impact of employer size and mandates on self-insurance adoption.
Main Methods:
- Utilized data from the 1989 Survey of Health Insurance Plans.
- Estimated predictive models for self-insurance among private employers.
- Developed models for all health plan sponsors, including public entities, unions, and trade associations.
Main Results:
- A self-insurance threshold was identified around 100 employees for private employers.
- This threshold extended to approximately 200 employees when considering all plan sponsors.
- Unionized plans showed a higher likelihood of being self-insured.
- Alcohol treatment mandates correlated with increased self-insurance, while mental health mandates showed the opposite.
Conclusions:
- Employer size is a significant determinant of self-insurance adoption.
- The presence of union members and specific state mandates (alcohol vs. mental health) influence self-insurance decisions.
- Findings highlight the complex interplay between employer characteristics, plan design, and regulatory environments in health benefit funding.