Small group employer participation in New Mexico's State Coverage Insurance program: lessons for federal reform

To identify factors associated with small group employer participation in New Mexico's State Coverage Insurance (SCI) program.

Telephone surveys of employers participating in SCI (N=269) and small employers who inquired about SCI (N=148) were fielded September 2008-January 2009.

Descriptive and multivariate analyses investigated differences between employer samples, including employer characteristics, concerns that applied to the business when deciding whether to participate in SCI, prior offerings of insurance to workers, and perceived affordability of the program.

Unweighted employer samples yielded 88 and 75 percent response rates for the participating and inquiring employers, respectively.

The administrative issue most commonly selected by inquiring employers as applying to their business was difficulty understanding how eligibility requirements applied to their business and its employees (53.5 percent). Inquiring businesses were significantly more likely to report concern about affording to pay the premiums in the first month (35.6 versus 18.7 percent) and the cost to the business over the long run (46.5 versus 26.6 percent) relative to participating employers. From the model results, businesses with the fewest full-time employees (zero to two) were 19 percentage points less likely to participate relative to businesses with six or more full-time employees.

Administrative and cost barriers to participation in SCI reported by employers suggest that the tax credit offered to small businesses under new federal provisions, which merely offsets the employer portion of premium, could be more effective if accompanied by additional supports to businesses.