Small Group Employer Participation in New Mexico's State Coverage Insurance Program: Lessons for Federal Reform

Abstract

Objective. To identify factors associated with small group employer participation in New Mexico's State Coverage Insurance (SCI) program. Data Sources. Telephone surveys of employers participating in SCI (N=269) and small employers who inquired about SCI (N=148) were fielded September 2008–January 2009. Study Design. Descriptive and multivariate analyses investigated differences between employer samples, including employer characteristics, concerns that applied to the business when deciding whether to participate in SCI, prior offerings of insurance to workers, and perceived affordability of the program. Data Collection/Extraction Methods. Unweighted employer samples yielded 88 and 75 percent response rates for the participating and inquiring employers, respectively. Principal Findings. The administrative issue most commonly selected by inquiring employers as applying to their business was difficulty understanding how eligibility requirements applied to their business and its employees (53.5 percent). Inquiring businesses were significantly more likely to report concern about affording to pay the premiums in the first month (35.6 versus 18.7 percent) and the cost to the business over the long run (46.5 versus 26.6 percent) relative to participating employers. From the model results, businesses with the fewest full‐time employees (zero to two) were 19 percentage points less likely to participate relative to businesses with six or more full‐time employees. Conclusions. Administrative and cost barriers to participation in SCI reported by employers suggest that the tax credit offered to small businesses under new federal provisions, which merely offsets the employer portion of premium, could be more effective if accompanied by additional supports to businesses.

Implementing Small Group Health Insurance Reform

“…This study extends the existing literature in several ways. While state health reform efforts are routinely evaluated, relatively few investigations examine state initiatives targeted specifically at reforming the small group market, particularly in recent years (Buchmueller & Jensen, 1997;Burke, 2008;Jensen & Morrisey, 1999;Sommers et al, 2010;Xirasagar, Stoskopf, Shrader, & Glover, 2004). Indeed, the dearth of research in this area is highlighted by one recent review, which in noting the lack of evaluation efforts observed that "the success or failure of many small group business insurance initiatives remains unknown" (Napel, Cohn, & Martinez-Vidal, 2009).…”

“…Outside of a handful of studies, however, the implementation side of the small group health insurance reform equation has generally been ignored (Burke, 2008;Hall, 2000;Silow-Carroll, Waldman, & Meyer. 2001;Sommers et al, 2010). This is with respect to key implementation activities such as outreach and oversight.…”

“…In contrast, marked gains in enrollment among low-income, uninsured individuals under New Mexico's State Coverage Insurance program has been attributed, in part, to effective engagement between the state's health insurance brokers and small business community (Sommers et al, 2010). Evaluators report that the state has worked closely with brokers since the program's beginning, recruiting them, training them, and providing them with critical support services, including streamlining referrals with interested employers.…”

Harvesting the Lessons of State Health Policy

“…Small employers who inquired about SCI but who decided not to participate were significantly more likely to report affordability concerns than did participating employers. This finding highlights that the size of employer subsidies will impact whether the ACA's small employer tax credits will encourage employers to offer coverage (Sommers et al 2011). …”