If proposed health care legislation is enacted, it would set new standards in the employer-based insurance system. Approximately 18.4 million Californians and 161 million Americans under the age of 65 rely upon employer-based insurance for their health care coverage.
Both House and Senate versions of reform legislation entail specific requirements for employer-based insurance. While the vast majority of employees work for firms that currently comply with most new standards, reform legislation, if passed, would increase protection for many insured workers and their families in California. Firms that buy insurance in the small group market will be most affected by these changes.
A study based on a 2009 survey of 827 private firms with establishments in California finds that:
- The House bill would set limits on out-of-pocket expenses for all employer based plans; the Senate bill would do so for non-self-insured plans. 23 percent of California workers covered by employer plans currently have plans with no out-of-pocket limit, or a limit above those proposed in the bills.
- Lifetime maximum limits on benefits received under an employer plan would be eliminated for about 40 percent of Californians with job-based coverage under both of the bills. Since 89 percent of plans with maximum lifetime limits in 2009 had limits of $2M or more, the impact of this change will be minimal on most employers but meaningful for those employees who meet the limits.
- Both House and Senate bills stipulate that preventive benefits should not be subject to any cost-sharing, including a deductible. About ten percent of California insured workers are enrolled in a plan where preventive benefits are subject to a deductible.
- The House bill would require all employer plans to provide prescription drug coverage; the Senate bill would require small employers to do so. Currently 99 percent of Californians enrolled in an employer plan already have coverage for prescription drugs.
- 98 percent of employees with job-based coverage are in plans that pay at least 60 percent of medical costs on average, the minimum standard in the Senate bill.
- In the Senate bill, the waiting period for eligibility for coverage would be limited to 90 days. Currently, about six percent of covered workers are employed by a firm that requires more than 90 days to wait for eligibility.
- The Senate bill excise tax on high-cost plans would affect at least 17 percent of insured workers with single coverage and 14 percent with family coverage, with PPO plans and plans in the San Francisco area the most likely to be subject to the tax.
- Employer contributions toward the cost of coverage do not currently meet the contribution standard proposed by the House for 12 percent of single coverage enrollees and about 32 percent of family coverage enrollees.
About the Study
Data for this study are from the 2009 California Employer Health Benefits Survey sponsored by the California HealthCare Foundation (CHCF) and conducted by the National Opinion Research Center (NORC) at the University of Chicago. The 2009 study data are from 827 private firms with establishments in California.
California HealthCare Foundation (CHCF) and the National Opinion Research Center (NORC) jointly produce the California Employer Health Benefits Survey. Researchers at NORC design and analyze the survey results. National Research LLC (NR) administers the telephone survey. Findings are from a random sample of 827 interviews with employee benefit managers in private firms in California. NR conducted interviews from April to July 2009. The sample of firms was drawn from the Dun & Bradstreet list of private employers with three or more workers. The margin of error for responses among all employers is +/- 3.4 percent.
Related Publication
Gabel, J., Jacobs, K., Tan, L., McDevitt, R., Pickreign, J., and KC, S. December 2009. "National Health Reform Requirements and California Employers." Issue Brief. Berkeley, CA: UC Berkeley Center for Labor Research and Education.
About the National Opinion Research Center at the University of Chicago (NORC)
NORC, known since its founding in 1941 as the National Opinion Research Center, pursues objective research in the public interest. NORC has offices on the University of Chicago campus and in Chicago's downtown Loop and Bethesda, Maryland. http://www.norc.org
About the UC Berkeley Center for Labor Research and Education
The Labor Center is a public service and outreach program of UC Berkeley's Institute for Research on Labor and Employment (IRLE), conducting research and education on issues related to labor and employment, and working with unions, government, and employers to develop innovative policy perspectives and programs. http://www.irle.berkeley.edu/
