Employer Subsidies for Health Insurance Premiums: Massachusetts' Unique Experiment

Abstract

Efforts to enroll low-income workers in premium assistance programs are constrained by the health insurance offer rates of the firms who employ them. One solution is to target premium subsidies to small firms as well as to their low-income workers, and Massachusetts is the sole state to have tried this. Firms participating in the state's Insurance Partnership were more likely to be self-employed compared with non-participating small firms. Self-employed firms receive a double bonus: assistance payments as both employer and employee. Employer participation in the program has been limited by the low income eligibility threshold and small employer subsidies.