Policies adopted by employers to encourage or discourage enrollment in employer-sponsored health plans.
The two kinds of policies are (i) regarding eligibility and (ii) the take-up rate. It is seen that in health coverage offering firms, 14% of employees worked for firms that offered cashback payments in the event the employee refuses coverage.
Large firms were approximately twice as likely to provide cash return payments as smaller firms. Further, it is seen that around “30% of workers “employed in financial sectors were working in firms that offered cashback payments, but in the case of the retail sector, this constituted just 3% of the workforce. It is often seen that employers subject refusing employees to “medical underwriting.” (Gabel, et.al, 2001).
The basic idea behind such underwriting is to circumvent cases of employees paying the health coverage premium until they fall ill and then subscribe to the company plan.
Age cohort differences in employer-sponsored health insurance
It is perceived that large differences exist in employer-sponsored insurance coverage between young adults and their older counterparts. It needs to be considered if these low rates are of a transitory or enduring nature. If it is purely transitory, then the lawmakers need to make adjustments to help young policyholders in their change over into Employer-sponsored insurance coverage. However, if this is permanent nature, then, it becomes necessary for policy framers to “develop not age-specific but cohort-specific models that address permanent problems.” (Glied and Stabile, 2001).
The fact that if the expenditure on employer-sponsored health insurance has been reduced by 45% would also render spending on medical expenses reduced by 45% is a wrong concept since the actual expenses depend upon the acceptance of the insurance and not any other considerations. Therefore, it is quite possible that although employer-sponsored health insurance rates reduce, there may not be a concurrent reduction in spending, and it is also possible that spending may increase during this corresponding period. Thus, the main factor may be in terms of whether the workman accepts the insurance which he may decline in case it is too high, as compared with his level of earnings, or due to any other personal choice.
The state’s decision to subsidize small employer health insurance for two years means that with this, a smaller employer could offer an unfair competitive advantage to a larger firm since now the small firm can have larger profits or produce goods at lower prices to the ultimate end user. This could also be seen in terms of the fact that the smaller employer who can offer health insurance is at a clear disadvantage over the small firm who cannot, since it now creates “conflict of interests.” (Banja, 2009).
The situation that now arises is that the smaller firm that has been denied the subsidized health insurance would continue denying it to its employees, and this would create market misbalances that need to be resolved amicably.
References
Banja, John D. (2009). The improbable future of employment-based insurance. Web.
Gabel, Jon R et al. (2001). Embraceable you: How employers influence health plan enrollment: Policies affecting eligibility and take-up rates. Health affairs. 2009. Web.
Glide, Sherry., & Stablile Mark. (2001). Generation vexed: Age-Cohort differences in employer-sponsored health insurance coverage. Health Affairs. 2009. Web.
Policy brief. (2005). HR Policy Association. 2009. Web.