Employment and Health Benefits -- Copyright -- Preface -- Acknowledgments -- Contents -- Summary -- EMPLOYMENT-BASED HEALTH BENEFITS IN CONTEXT -- Historical Development -- Key Statistics -- International Comparisons -- Scope and Functions -- Access to Health Services -- Costs in Context -- DISTINGUISHING FEATURES OF THE CURRENT SYSTEM -- Voluntary Group Purchase -- Lack of Universal Coverage -- Risk Selection and Discrimination -- Dispersed Power and Accountability -- Diversity -- Innovation -- Discontinuity -- Barriers to Cost Management -- Complexity -- Strengths and Limitations of These Features -- FUTURE DIRECTIONS -- To Improve a Voluntary System -- Reducing or Compensating for Risk Selection -- Subsidizing Coverage -- Other Regulatory Issues -- The Financing Dilemma -- Beyond Voluntary Coverage -- Research Agenda -- FINAL THOUGHTS -- 1 Background and Introduction -- EMPLOYMENT-BASED HEALTH BENEFITS IN CONTEXT -- OVERVIEW OF REPORT -- WHY THIS STUDY? -- Relation to the Debate over Health Care Reform -- Issues and Concerns -- KEY CONCEPTS AND TERMS AS USED IN THIS REPORT -- Employment-Based Health Benefits -- Social Insurance and Private Insurance -- Small and Large Groups -- Risk, Insurance, and Benefits -- Insurable Events -- Moral Hazard, Biased Selection, Risk Segmentation, and Underwriting -- CONCLUSION -- 2 Origins and Evolution of Employment-Based Health Benefits -- THE BIRTH OF INSURANCE FOR MEDICAL CARE EXPENSES -- Early Voluntary Initiatives -- Early Public Action -- THE DIVERGENT PATH OF THE UNITED STATES -- Unsuccessful Early State Initiatives -- Proposals for National Health Insurance in the Depression and Postwar Years -- Innovation in the Private Sector -- Employment-Based Benefits, Federal Regulations, and Union Policies -- Growth and Change in Health Insurance Products.

Federal Government as Sponsor of Employee Health Benefits Program -- EARLY COST MANAGEMENT EFFORTS BY INSURERS AND OTHERS -- Management of the Risk Pool -- Design of the Benefit Plan -- Controls on Payments to Providers -- Constraints on Supply -- Utilization Review -- Impact of Early Cost Management Efforts -- THE LIMITS OF VOLUNTARY HEALTH BENEFITS AND MEDICARE AND MEDICAID -- Medicare -- Medicaid -- National Health Insurance Revisited -- FEDERAL REGULATION AND THE EMPLOYER'S GROWING ROLE -- Federal and State Roles Before 1974 -- The Employee Retirement Income Security Act of 1974 -- CONCLUSION -- 3 Employment-Based Health Benefits Today -- DATA SOURCES -- WHO IS AND IS NOT COVERED BY EMPLOYMENT-BASED HEALTH BENEFITS? -- Covered Workers and Family Members -- Uninsured Workers and Family Members -- Retirees -- Sources of Variation in Employment-Based Coverage -- WHAT TYPES OF COVERAGE ARE OFFERED? -- Types of Health Plans -- Conventional Plans -- Network Plans -- Covered Services -- Cost Sharing and Other Limits on Coverage -- WHAT DO EMPLOYMENT-BASED HEALTH BENEFITS COST? -- Premium Cost for Employer and Employee -- Administrative Expenses -- Tax Expenditures -- WHO BEARS THE RISK? -- WHAT OTHER HEALTH-RELATED BENEFITS DO EMPLOYERS OFFER? -- Overview of Mandatory and Voluntary Programs -- Workers' Compensation -- Health Promotion and Employee Assistance Programs -- Flexible Benefits -- CONCLUSION -- 4 What Does Employer Management of Health Benefits Involve? Overview and Case Study -- OVERVIEW -- Types of Decisions, Tasks, and Options -- Sources of Diversity in Program Design and Management -- Suppliers of Health Insurance, Administrative, and Other Services -- Cooperative Efforts -- CORE CASE STUDY -- The Organization and Its Environment -- History -- Considering New Options -- Further Data Analysis -- Financial and Legal Questions.

Preliminary Discussion of Alternatives -- Employee Advisory Group -- Request for Proposals -- Evaluating Responses and References -- The Final Decision and Its Implementation -- Weighing Alternatives -- Implementation -- CONTRASTING CASES -- A Small Employer -- A Large, Multistate Employer -- CONSEQUENCES FOR EMPLOYEES -- CONSEQUENCES FOR PRACTITIONERS AND PROVIDERS -- A NOTE ON EMPLOYERS' LEGAL LIABILITY FOR MANAGED CARE -- CONCLUSION -- ADDENDUM -- Excerpt from the Request for Proposal, ''Contract for Managed Health Care Plan," Issued by the Office of Human Resources -- Section II Current Health Plan Coverage -- Current Indemnity Plan Design -- Section III Proposed Plan Design -- Assumptions and Exhibits -- Section IV Questionnaire -- General -- Financial -- Claims Administration -- Managed Care Features -- Provider -- Section V Selection Criteria -- Determination of Competitive Range and Contractor Selection -- 5 Risk Selection, Risk Sharing, and Policy -- BASIC CONCEPTS -- FACTORS CONTRIBUTING TO RISK SELECTION -- Individual Factors -- Employer Factors -- Health Plan and Insurer Factors -- A Case in Point -- EVIDENCE OF RISK SELECTION -- POLICY QUESTIONS -- Equity -- Access to Health Care -- Cost -- Quality of Care -- Implications of the Americans with Disabilities Act -- STRATEGIES FOR RESPONDING TO RISK SELECTION AND RISK SEGMENTATION -- Limiting Underwriting Practices -- Managing or Regulating Competition -- Consolidating Choices or Risk at the Employer Level -- Regulating the Terms of Competition at the Community Level -- Risk Adjusting Payments to Health Plans -- Policy and Strategic Issues -- Techniques for Risk Adjusting Payments to Health Plans -- Demographic Measures -- Prior Use and Cost Measures -- Health Status Measures -- Reinsuring, Allocating, and Pooling High Risk Individuals -- CONCLUSION.

6 Health Care Costs: More Questions than Answers -- HEALTH CARE SPENDING: TRENDS AND EXPLANATIONS -- PUBLIC AND PRIVATE RESPONSES TO ESCALATING HEALTH CARE COSTS -- Government Initiatives -- Attempts to Control the Use, Price, and Supply of Medical Services -- The Move to Prospective Payment -- Payment Adequacy and Cost Shifting -- Private Purchasers -- Strategies -- Impact of Private Cost Containment Strategies -- FUNCTIONING OF THE HEALTH CARE MARKET -- THE QUESTION OF VALUE -- CONCLUSION -- 7 Findings and Recommendations -- RECAPITULATION -- FEATURES, STRENGTHS, AND LIMITATIONS OF THE CURRENT SYSTEM -- Voluntary Group Purchase -- Lack of Universal Coverage -- Risk Selection and Discrimination -- Dispersed Power and Accountability -- Diversity -- Innovativeness -- Discontinuity -- Barriers to Cost Management -- Complexity in Coverage, Administration, and Regulation -- Strengths and Limitations -- FUTURE DIRECTIONS -- To Improve a Voluntary System -- Reducing or Compensating for Risk Selection -- Subsidizing Coverage and Controlling Cost Shifting -- Other Regulatory Issues -- State Experimentation -- The Financing Dilemma -- Beyond Voluntary Coverage -- A FEW COMMENTS ON PRACTICAL AND TECHNICAL CHALLENGES -- AGENDA FOR RESEARCH AND EVALUATION -- Methodologies for Risk Adjusting Payments to Health Plans -- Consequences of Underwriting Reforms -- Basic Benefits -- Employer Assistance with Employee Decisionmaking and Problem Resolution -- Continuity of Care -- FINAL THOUGHTS -- SUPPLEMENTARY STATEMENT OF A COMMITTEE MEMBER -- References -- APPENDIXES -- A Opinion Surveys on Employment-Based Health Benefits and Related Issues -- B Regulation of Employment-Based Health Benefits: The Intersection of State and Federal Law -- LEGAL FOUNDATIONS OF STATE INSURANCE REGULATION -- EARLY REGULATION OF HEALTH INSURANCE.

OVERVIEW OF CURRENT STATE REGULATION OF HEALTH INSURANCE -- Formation and Financial Matters -- Insurance Contract and Rate Regulation -- Unfair Insurance Practices -- Coverage and Mandates -- Managed Care -- Practical Consequences of Opting for a Fully Insured Health Benefits Plan -- FEDERAL REGULATION OF HEALTH BENEFITS -- Health Benefit Plans Under ERISA -- Legislative Focus and Definitions -- Reporting and Disclosure Requirements -- Fiduciaries -- Administration, Enforcement, and Preemption -- Practical Consequences of Opting for a Self-Insured Health Plan -- COBRA Continuation Coverage -- THE MEWA PROBLEM -- FEDERAL LAWS SUPPLEMENTING ERISA -- Taxation -- Medicare Secondary Payor -- The Civil Rights Act -- The Age Discrimination in Employment Act -- The Americans with Disabilities Act -- CONCLUSION -- NOTES -- C Participants in Meetings Held in Conjunction with Project -- PUBLIC MEETING -- WORKSHOP ON BIASED RISK SELECTION -- SYMPOSIUM PROGRAM -- D Biographies of Committee Members -- Glossary and Acronyms -- ACRONYMS -- Index.