EXHIBIT 3.

Predicted Probabilities Of Those Choosing A Health Reimbursement Arrangement (HRA) In 2004 Conditional On Prior-Year Employee- And Family-Level Characteristics

SOURCE: Alcoa Inc. employee files and medical claims files (2003–2004).

NOTES: The analysis is limited to those with family coverage. Among those with family coverage, unadjusted results indicate that 12.3 percent chose the HRA in 2004. We defined “no chronic condition” as no diagnosis of diabetes, asthma, or congestive heart failure (CHF)/coronary artery disease (CAD) in the family. For employees with family policies, total spending quartiles for 2003 were <$2,824, $2,824–$5,684, $5,685–$10,837, and >$10,837; wage quartiles were <$35,001, $35,001–$47,616, $47,617–$67,401, and >$67,401. Full logistic regression results for the models predicting selection of the HRA option in 2004 for both family and individual policyholders are available in an online supplement, at http:/content.healthaffairs.org/cgi/content/full/27/6/1671/DC1.