How Do Employers React to a Pay-or-Play Mandate? Early Evidence from San Francisco
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Abstract
In 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.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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- Erratum
- How Do Employers React to a Pay-or-Play Mandate? Early Evidence from San Francisco
Articles in the same Issue
- Article
- The Effects of Consumer-Directed Health Plans on Episodes of Health Care
- A Primer on the Economics of Prescription Pharmaceutical Pricing in Health Insurance Markets
- The Impact of Household Investments on Early Child Neurodevelopment and on Racial and Socioeconomic Developmental Gaps: Evidence from South America
- Should We Put a Thin Subsidy on the Policy Table in the Fight against Obesity?
- Does Patient Use of Medical Information Affect Physician Practice Incentives to Provide Care?
- How Do Consumer-Directed Health Plans Affect Vulnerable Populations?
- How Do Employers React to a Pay-or-Play Mandate? Early Evidence from San Francisco
- Determinants of Tobacco Control Funding: Evidence from U.S. States
- Toxic Choices: The Theory and Impact of Smoking Bans
- Pound Wise and Penny Foolish? Weight Loss and The Dynamics of Health Care Spending
- Regional Variation in Medication Adherence
- Erratum
- How Do Employers React to a Pay-or-Play Mandate? Early Evidence from San Francisco
