TIES THAT BIND - A CASE-STUDY OF THE LINK BETWEEN EMPLOYERS, FAMILIES, AND HEALTH BENEFITS

Most US residents receive health benefits from their employer. Groups of employees and their families are therefore the basis for health car e financing. Health care costs rose dramatically during the 1980s and employers looked for ways to control them. One approach is to control the size of the group provided health benefits by an employer. This pa per uses a demographic perspective to explore the determinants of chan ge in an employer's group. It examines the linkages among employer pol icies, employee turnover, and family dynamics. How much control does a n employer have over group size? We identify the relative contribution s of employment and demographic processes to changing group size. We u se a decomposition technique based on matching individual records betw een consecutive years. We apply this technique to a case study of the health benefits group consisting of General Motors salaried employees and their families. We find that employers face limits to the control that they can exert over the size of the health benefits group associa ted with their active workforce. Demographic processes unrelated to em ployee turnover or transfers to layoff or retirement accounted for a l arge portion of the population change in the case study.