State Variation in Insurance Laws a Major Driver of Employers’ Self-Insurance Decisions

Vol. II, No. 1
February 2004

Some researchers and policy analysts have speculated that employers tend to self-insure their firms in an effort to circumvent compliance with evolving state mandates on coverage, which may require them to provide generous benefit packages. However, new research by Gail Jensen, Ph.D., at Wayne State University suggests otherwise. In collaboration with colleagues Michael Morrisey, Ph.D., of the University of Alabama at Birmingham and Jon Gabel at the Hospital Research and Educational Trust, Jensen found that employers are using self-insurance to avoid conflicts in insurance laws across states, rather than as a mechanism to avoid providing rich benefits