How Do Employers React to A Pay-or-Play Mandate?

Early Evidence from San Francisco

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, the researchers found 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 percent 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.

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