Examining Substitution: State Strategies to Limit "Crowd Out" in the Era of Children's Health Insurance Expansions. Mechanism 7: Reimbursements To Small Businesses


Assisting employers through reimbursement plans is another strategy geared toward helping small employers purchase health coverage. Massachusetts has planned the implementation of an experimental program in the year 1999, entitled the "Insurance Reimbursement Plan" to be administered through the Medical Assistance program. The Plan will be structured to reimburse small businesses (i.e., employers with less than 50 workers) that cover in excess of 50% of the cost of insurance for their employees. Eligible employers will be annually reimbursed $1000 for family coverage, $800 for couples coverage, and $500 for individual coverage. This option, not yet implemented, has been considered quite controversial as it would be paying employers to provide insurance, which in some cases, they may already offer.