How Do Employers React to a Pay-or-Play Mandate? Early Evidence from San Francisco
AbstractIn 2008 San Francisco implemented major health reform, becoming the first city to adopt a pay-or-play employer health spending mandate. It also created Healthy San Francisco, a new “public option” low-cost health access plan for the uninsured. This study evaluates employer-level health benefit offering responses to the pay-or-play mandate in the first year of implementation using the 2008 Bay Area Employer Health Benefits Survey and a difference-in-difference estimator. Although 92% of firms subject to the mandate already offered insurance prior to enactment, we find that 76% of firms had to expand benefits to comply with the minimum hourly spending requirement for each worker. Nevertheless, most surveyed San Francisco employers (61%) were supportive of the law. There is substantial employer demand for the public option, with 18% of firms using Healthy San Francisco for at least some employees, yet there is little evidence of firms dropping or restricting existing insurance offerings in the first year after implementation. A non-trivial portion of firms chose to meet the mandate by paying into health reimbursement accounts (14%). These results confirm that employer mandate details can have crucial effects on employer behavior. While there are important geographic and political characteristics of San Francisco that are important to bear in mind, San Francisco’s early experience suggests that implementation of a strong pay-or-play mandate is indeed feasible.
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Bibliographic InfoArticle provided by De Gruyter in its journal Forum for Health Economics & Policy.
Volume (Year): 14 (2011)
Issue (Month): 2 (April)
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Web page: http://www.degruyter.com
Other versions of this item:
- Carrie Hoverman Colla & William H. Dow & Arindrajit Dube, 2010. "How Do Employers React to A Pay-or-Play Mandate? Early Evidence from San Francisco," NBER Working Papers 16179, National Bureau of Economic Research, Inc.
- Colla, Carrie Hoverman & Dow, William H. & Dube, Arindrajit, 2010. "How Do Employers React to a Pay-or-Play Mandate? Early Evidence from San Francisco," Institute for Research on Labor and Employment, Working Paper Series qt2sw0q5dh, Institute of Industrial Relations, UC Berkeley.
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
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