Consumer-Directed Health Plans And Health Savings Accounts

Have They Worked For Small Businesses?

by Susan M. Gates, Kanika Kapur, Pinar Karaca-Mandic

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Cost has deterred the majority of small businesses from providing health insurance to their workers. Consumer-directed health plans, which are potentially less costly than traditional health plans, may be well suited to workers in small businesses. The authors study the factors that are associated with CDHP offering, determine the variation in CDHP offering among large and small firms, and develop models of persistence in CDHP offering. Their analysis of the Kaiser-HRET survey shows that small firms have been no quicker in their uptake of CDHPs than larger firms, and appear to display somewhat more churning in CDHP offering than large firms. Small firms that employ between three and 49 workers are less likely to offer HRA/HSA plans than large firms. Furthermore, firms that employ 200 to 499 workers appear to be less likely to offer both HRA/HSA plans and HD plans compared to larger firms. Their results suggest a limited role for the current incarnation of consumer-directed health plans in encouraging small business to provide insurance.

Table of Contents

  • Chapter One


  • Chapter Two

    Background: The Birth of Consumer-Directed Health Plans

  • Chapter Three

    Literature Review

  • Chapter Four

    Data and Methodology

  • Chapter Five


  • Chapter Six


The research described in this report was conducted by the Kauffman-RAND Institute for Entrepreneurship Public Policy.

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