THE IMPACT OF REPEALING THE EXCLUSION FOR EMPLOYER-SPONSORED INSURANCE

The paper uses a new micro-simulation model to estimate the impact of repealing the employer-sponsored insurance (ESI) exclusion on ESI coverage given two alternative scenarios: a non-group market that is fully underwritten and a modified community-rated market where the low income population receives premium subsidies. When the alternative to ESI is the underwritten market, repeal of the exclusion reduces ESI coverage by 14 percent both overall and for those over 400 percent FPL. In contrast, individuals over 400 percent FPL are less likely to leave ESI when the alternative is a subsidized modified community-rated market.