IDEAS home Printed from https://ideas.repec.org/a/bla/jrinsu/v79y2012i1p231-260.html
   My bibliography  Save this article

Do Small‐Group Health Insurance Regulations Influence Small Business Size?

Author

Listed:
  • Kanika Kapur
  • Pinar Karaca‐Mandic
  • Susan M. Gates
  • Brent Fulton

Abstract

The cost of health insurance has been the primary concern of small business owners for several decades. State small group health insurance reforms, implemented in the 1990s, aimed to control the variability of health insurance premiums and to improve access to health insurance. Small group reforms only affected firms within a specific size range, and the definition of the upper size threshold for small firms varied by state and over time. As a result, small group reforms may have affected the size of small firms around the legislative threshold and may also have affected the propensity of small firms to offer health insurance. Previous research has examined the second issue, finding little to no effect of health insurance reforms on the propensity of small firms to offer health insurance. In this paper, we examine the relationship between small group reform and firm size. We use data from a nationally representative repeated cross-section survey of employers and data on state small group health insurance reform. Contrary to the intent of the reform, we find evidence that small firms just below the regulatory threshold that were offering health insurance grew in order to bypass reforms.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Kanika Kapur & Pinar Karaca‐Mandic & Susan M. Gates & Brent Fulton, 2012. "Do Small‐Group Health Insurance Regulations Influence Small Business Size?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 79(1), pages 231-260, March.
  • Handle: RePEc:bla:jrinsu:v:79:y:2012:i:1:p:231-260
    DOI: j.1539-6975.2011.01421.x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/j.1539-6975.2011.01421.x
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/j.1539-6975.2011.01421.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kanika Kapur, 2003. "Labor Market Implications of State Small Group Health Insurance Reform," Public Finance Review, , vol. 31(6), pages 571-600, November.
    2. Alan C. Monheit & Jessica Primoff Vistnes, 1999. "Health Insurance Availability at the Workplace: How Important are Worker Preferences?," Journal of Human Resources, University of Wisconsin Press, vol. 34(4), pages 770-785.
    3. Thomas Buchmueller & John Dinardo, 2002. "Did Community Rating Induce an Adverse Selection Death Spiral? Evidence from New York, Pennsylvania, and Connecticut," American Economic Review, American Economic Association, vol. 92(1), pages 280-294, March.
    4. David Card & Dean Hyslop, 1997. "Does Inflation "Grease the Wheels of the Labor Market"?," NBER Chapters, in: Reducing Inflation: Motivation and Strategy, pages 71-122, National Bureau of Economic Research, Inc.
    5. Henry J. Aaron & Barry P. Bosworth, 1994. "Economic Issues in Reform of Health Care Financing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1994 Micr), pages 249-299.
    6. Robert Kaestner & Kosali Ilayperuma Simon, 2002. "Labor Market Consequences of State Health Insurance Regulation," ILR Review, Cornell University, ILR School, vol. 56(1), pages 136-159, October.
    7. David M. Cutler, 1994. "A Guide to Health Care Reform," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 13-29, Summer.
    8. Currie, Janet & Madrian, Brigitte C., 1999. "Health, health insurance and the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 50, pages 3309-3416, Elsevier.
    9. Schivardi, Fabiano & Torrini, Roberto, 2004. "Threshold effects and firm size: the case of firing costs," LSE Research Online Documents on Economics 19956, London School of Economics and Political Science, LSE Library.
    10. David Cutler, 1994. "Market Failure in Small Group Health Insurance," NBER Working Papers 4879, National Bureau of Economic Research, Inc.
    11. Pietro Garibaldi & Lia Pacelli & Andrea Borgarello, 2004. "Employment Protection Legislation and the Size of Firms," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 63(1), pages 33-68, April.
    12. Kanika Kapur, 2004. "The Impact of the Health Insurance Market on Small Firm Employment," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 71(1), pages 63-90, March.
    13. David M. Cutler & Brigitte C. Madrian, 1998. "Labor Market Responses to Rising Health Insurance Costs: Evidence on Hours Worked," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 509-530, Autumn.
    14. Verick, Sher, 2004. "Threshold Effects of Dismissal Protection Legislation in Germany," IZA Discussion Papers 991, Institute of Labor Economics (IZA).
    15. Monheit, Alan C. & Steinberg Schone, Barbara, 2004. "How has small group market reform affected employee health insurance coverage?," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 237-254, January.
    16. Madrian, Brigitte & Cutler, David, 1998. "Labor Market Responses to Rising Health Insurance Costs," Scholarly Articles 2643643, Harvard University Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Srikant Devaraj & Pankaj C Patel, 2017. "Health insurance and employee productivity: Findings from the 2007 Survey of Business Owners," Economics Bulletin, AccessEcon, vol. 37(2), pages 1351-1364.
    2. C. J. Krizan & Adela Luque & Alice Zawacki, 2014. "The Effect Of Employer Health Insurance Offering On The Growth And Survival Of Small Business Prior To The Affordable Care Act," Working Papers 14-22, Center for Economic Studies, U.S. Census Bureau.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kanika Kapur & José J. Escarce & M. Susan Marquis & Kosali I. Simon, 2005. "Where do the sick go? Health insurance and employment in small and large firms," Open Access publications 10197/259, School of Economics, University College Dublin.
    2. Kanika Kapur & José J. Escarce & M. Susan Marquis & Kosali I. Simon, 2008. "Where Do the Sick Go? Health Insurance and Employment in Small and Large Firms," Southern Economic Journal, John Wiley & Sons, vol. 74(3), pages 644-664, January.
    3. Kanika Kapur, 2003. "Labor Market Implications of State Small Group Health Insurance Reform," Public Finance Review, , vol. 31(6), pages 571-600, November.
    4. Wang Ping, 2009. "Effects of Disability-Based Underwriting Prohibitions on the Labor Market," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 4(1), pages 1-19, November.
    5. Christine Jolls, 2007. "Employment Law and the Labor Market," NBER Working Papers 13230, National Bureau of Economic Research, Inc.
    6. Laura Bucila, 2008. "Employment-Based Health Insurance and the Minimum Wage," Working Papers 0812, College of the Holy Cross, Department of Economics.
    7. Hashem Abdullah AlNemer, 2018. "Perception of the Benefits and Features of Health Insurance Policies Offered by the Employers: Empirical Findings from Saudi Arabia," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(6), pages 214-214, April.
    8. Steven F. Lehrer & Nuno Sousa Pereira, 2008. "Worker Sorting, Health Insurance and Wages: Further Evidence from Displaced Workers in the United States," CEF.UP Working Papers 0804, Universidade do Porto, Faculdade de Economia do Porto.
    9. Lehrer, Steven F. & Pereira, Nuno Sousa, 2007. "Worker sorting, compensating differentials and health insurance: Evidence from displaced workers," Journal of Health Economics, Elsevier, vol. 26(5), pages 1034-1056, September.
    10. Joanna N. Lahey, 2012. "The efficiency of a group‐specific mandated benefit revisited: The effect of infertility mandates," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(1), pages 63-92, December.
    11. C. J. Krizan & Adela Luque & Alice Zawacki, 2014. "The Effect Of Employer Health Insurance Offering On The Growth And Survival Of Small Business Prior To The Affordable Care Act," Working Papers 14-22, Center for Economic Studies, U.S. Census Bureau.
    12. Kyung Min Lee & Chanup Jeung, 2021. "The incidence of the healthcare costs of chronic conditions," International Journal of Health Economics and Management, Springer, vol. 21(4), pages 473-493, December.
    13. Maclean, J. Catherine & Webber, Douglas A., 2019. "Government Regulation and Lifecycle Wages: Evidence from Continuing Coverage Mandates," IZA Discussion Papers 12464, Institute of Labor Economics (IZA).
    14. Jinqi Ye, 2017. "The Effects of State and Federal Mental Health Parity Laws on Working Time," Center for Policy Research Working Papers 200, Center for Policy Research, Maxwell School, Syracuse University.
    15. Li, Xiaoxue & Ye, Jinqi, 2017. "The spillover effects of health insurance benefit mandates on public insurance coverage: Evidence from veterans," Journal of Health Economics, Elsevier, vol. 55(C), pages 45-60.
    16. Ilayperuma Simon, Kosali, 2005. "Adverse selection in health insurance markets? Evidence from state small-group health insurance reforms," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1865-1877, September.
    17. Jennifer Feenstra Schultz & David Doorn, 2009. "Employer Health Benefit Costs and Demand for Part-Time Labor," Working Papers 09-08, Center for Economic Studies, U.S. Census Bureau.
    18. Brigitte C. Madrian & Lars John Lefgren, 1999. "A Note on Longitudinally Matching Current Population Survey (CPS) Respondents," NBER Technical Working Papers 0247, National Bureau of Economic Research, Inc.
    19. Velamuri, Malathi, 2009. "Taxes, Health Insurance and Women’s Self-Employment," MPRA Paper 15731, University Library of Munich, Germany.
    20. Koller, Lena, 2005. "Arbeitsrechtliche Schwellenwerte: Regelungen an der Schwelle zur Unüberschaubarkeit," Discussion Papers 40, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.

    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jrinsu:v:79:y:2012:i:1:p:231-260. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/ariaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.