Examining Substitution: State Strategies to Limit "Crowd Out" in the Era of Children's Health Insurance Expansions. Mechanism 6: Employer Buy-Ins


Allowing employers to directly buy into state programs at reasonable costs is another means of encouraging employers to take responsibility for sponsoring workers' insurance. The Washington Basic Health Plan (BHP) established provisions in which employers can buy into the program. As BHP is generally less expensive than private insurance for most employers due to subsidized premiums for low-income workers, there is a positive incentive for employers to participate. The employer buy-in also provides employers the benefit of the larger purchasing power and risk pool of the state. Employers contribute approximately $45 per employee per month and employees contribute the remainder of the premium based on a sliding fee scale. For low income workers, the $45 employer contribution covers the employee share of the monthly premium . However, if a low income worker enrolls in BHP as an individual, the monthly premium is approximately $10 for that individual. Despite the reasonable cost of employer buy-in, Washington state has found that some employers will offer to "subsidize" employees for the $10 premium required for individual enrollment in BHP, rather than contributing $45 as their employer. This has made the buy-in program challenging, as it is administratively difficult for the program to control. Other states have considered similar programs to increase employer participation. A small employer alliance in Colorado has also expressed an interest in participating in a buy-in program with the Colorado Child Health Plan. The Children's Basic Health Plan is currently examining the possibility of implementing an employer buy-in program.