Involvement of employers in the provision of health care in the United States has a long history. Employer-mediated health insurance has certain advantages compared to an individual market for health insurance. Employment-based insurance reduces the risk of adverse selection, allows workers to benefit from the expertise and buying power of the employer, and helps ameliorate cognitive biases that might lead workers to under-insure. Prior to passage of the Affordable Care Act (ACA), ERISA did little to affirmatively regulate the content of health benefit plans, and ERISA’s broad preemptive reach posed a significant obstacle to states attempting to impose content controls. The passage of the ACA and its conforming amendments to ERISA changed matters importantly but not completely; various ACA reforms now affect benefit plans directly or indirectly, while leaving largely in place ERISA’s overall scheme of regulation. Future reform efforts – whether single-payer (Medicare for All) or a public option – may very well change that, but for now ERISA retains its potency as a health insurance regulatory statute.

The first chapter presents seven models through which it is possible to finance healthcare services (and protect oneself from the risks of disease). Seven different funding models are introduced: (1) The direct market; (2) Voluntary health insurance; (3) Social health insurance; (4) Targeted programs; (5) Mandatory residence insurance; (6) The universalist model; (7) Medical savings accounts. For each model discussed, attention is paid to the following dimensions: who pays and who benefits from the system; the number and legal status of the insurers; the methods by which users contribute financially; the freedom of choice granted to citizens; the relationships between insurers and providers; the role played by the State.