Health Care Reform: How Do Employers React to A Pay-or-Play Mandate?

Early Evidence from San Francisco Is Positive

In 2006 San Francisco adopted major health reform, becoming the first city to implement a pay-or-play employer health spending mandate. It also created Healthy San Francisco, a “public option” to promote affordable universal access to care. Using the 2008 Bay Area Employer Health Benefits Survey, we find that most employers (75%) had to increase health spending to comply with the law, yet most (64%) are supportive of the law. There is substantial employer demand for the public option, with 21% of firms using Healthy San Francisco for at least some employees, yet there is little evidence of firms dropping existing insurance offerings in the first year after implementation. -- How Do Employers React to A Pay-or-Play Mandate? Early Evidence from San Francisco by Carrie Hoverman Colla, William H. Dow, Arindrajit Dube (NBER Working Paper No. 16179 July 2010).

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