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Most US residents receive health benefits from their employer. Groups of employees and their families are therefore the basis for health care 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 paper uses a demographic perspective to explore the determinants of change in an employer's group. It examines the linkages among employer policies, employee turnover, and family dynamics. How much control does an employer have over group size? We identify the relative contributions of employment and demographic processes to changing group size. We use a decomposition technique based on matching individual records between 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 associated with their active workforce. Demographic processes unrelated to employee turnover or transfers to layoff or retirement accounted for a large portion of the population change in the case study.

Ties that bind: A case study of the link between employers, families, and health benefits