title: Tax subsidies for employer-sponsored health insurance: updated microsimulation estimates and sensitivity to alternative incidence assumptions.
abstract: OBJECTIVE
  To estimate 2012 tax expenditures for employer-sponsored insurance (ESI) in the United States and to explore the sensitivity of estimates to assumptions regarding the incidence of employer premium contributions.
  
  
  METHODS
  Nationally representative Medical Expenditure Panel Survey data from the 2005-2007 Household Component (MEPS-HC) and the 2009-2010 Insurance Component (MEPS IC).
  
  
  METHODS
  We use MEPS HC workers to construct synthetic workforces for MEPS IC establishments, applying the workers' marginal tax rates to the establishments' insurance premiums to compute the tax subsidy, in aggregate and by establishment characteristics. Simulation enables us to examine the sensitivity of ESI tax subsidy estimates to a range of scenarios for the within-firm incidence of employer premium contributions when workers have heterogeneous health risks and make heterogeneous plan choices.
  
  
  RESULTS
  We simulate the total ESI tax subsidy for all active, civilian U.S. workers to be $257.4 billion in 2012. In the private sector, the subsidy disproportionately flows to workers in large establishments and establishments with predominantly high wage or full-time workforces. The estimates are remarkably robust to alternative incidence assumptions.
  
  
  CONCLUSIONS
  The aggregate value of the ESI tax subsidy and its distribution across firms can be reliably estimated using simplified incidence assumptions.
authors: Division of Modeling and Simulation, Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Rockville, MD 20782, USA. emiller@ahrq.gov
authors: G Edward
authors: GE
authors: Miller
authors: Thomas M
authors: TM
authors: Selden
mesh_terms: D003258:Consumer Behavior / Q000191:economics; D006264:Health Benefit Plans, Employee / Q000191:economics*; D005102:Health Expenditures / Q000706:statistics & numerical data; D006801:Humans; D007183:Income Tax / Q000191:economics*; D019458:Insurance Coverage / Q000191:economics* / Q000706:statistics & numerical data; D017059:Models, Econometric; D017149:Private Sector / Q000191:economics; D012456:Salaries and Fringe Benefits / Q000191:economics* / Q000706:statistics & numerical data; D019464:Tax Exemption / Q000191:economics*; D014481:United States
references: Health Aff (Millwood). 2008 Nov-Dec;27(6):w472-81
references: 18796469
references: Int J Health Care Finance Econ. 2004 Jun;4(2):167-92
references: 15211105
references: J Econ Lit. 1986;24(2):629-75
references: 11617315
references: Health Serv Res. 1997 Oct;32(4):453-70
references: 9327813
references: Health Aff (Millwood). 2008 Nov-Dec;27(6):w462-71
references: 18796468
references: Health Aff (Millwood). 2008 Nov-Dec;27(6):w482-91
references: 18796467
references: Med Care. 2003 Jul;41(7 Suppl):III35-III43
references: 12865725
references: J Econ Perspect. 1992 Summer;6(3):3-21
references: 10128078
references: Am Econ Rev. 1994 Jun;84(3):622-41
references: 10134748
references: J Health Econ. 1999 Dec;18(6):709-25
references: 10847931
references: Int J Health Care Finance Econ. 2005 Mar;5(1):89-118
references: 15714265
references: Health Aff (Millwood). 2006 Nov-Dec;25(6):1568-79
references: 17102182
references: Health Serv Res. 2005 Aug;40(4):1021-39
references: 16033490
references: Int J Health Care Finance Econ. 2001 Sep-Dec;1(3-4):305-25
references: 14625931
references: Int J Health Care Finance Econ. 2001 Sep-Dec;1(3-4):293-304
references: 14625930
references: Inquiry. 1995-1996 Winter;32(4):379-91
references: 8567076
references: Health Aff (Millwood). 2008 May-Jun;27(3):622-32
references: 18474949