The different benefit structures appear to correlate fairly strongly with particular delivery systems. For example, nearly 90 percent of the Hour Bank plans are closed panels. Similarly, 75 percent of the Shreveport Plans are provided on an open panel basis, and nearly 80 percent of the Advice/Consultation plans are provided by staffs of attorneys. The Schedule of Services appears across all delivery systems, but it is found in conjunction with closed panels twice as often as with either open panel or staff plans.

Because of small cell sizes and statistically unreliable data values, no useful information is available on the mean number of hours of service provided by the Hour Bank plans. However, most plans appear to provide between 20 to 100 hours of service per person, maximum.

The various benefit structures do not correlate particularly strongly with source of funding. Plans funded by employers through collective bargaining are fairly evenly spread among the Hour Bank, Schedule of Services and Shreveport Plans. Employers funding plans unilaterally appear to prefer the Shreveport Plan. However, this preference is based upon a rather small number of cases. Employee association plans, both those funded from dues and those funded from general revenues, appear evenly spread across all three benefit structures, plus telephone advice and consultation. Individual payment plans utilize all four benefit structures (including telephone advice and consultation) in fairly even proportions.

2.5 Types of benefits

In the mail survey an effort was made to determine what types of legal matters are typically covered by legal service plans. Tables 2.10 and 2.11 provide, in descending order, lists of legal matters most often covered and most often excluded. The first three categories (advice, office work and court representation) are functional descriptions which accommodate the plans having a Shreveport plan type benefit structure.

From the table several aspects of plan coverage are particularly noteworthy: (a) Misdemeanor and juvenile criminal coverage are more likely to be provided then felony coverage;

(b) Some plans provide felony criminal coverage only in the "emergency" stages of the felony matter-through arraignment only;

(c) Probate and personal injury coverage, both traditionally provided on a contingent fee basis, are covered in some way by a large proportion of the plans (69.1 percent and 56.3 percent respectively);

(d) Approximately one-half of the plans provide some coverage for the non-fee costs associated with legal services;

(e) Approximately half of the plans provide representation in tax court but few provide tax preparation services; and

(f) A substantial proportion of plan coverage involve legal matters where the government is a party or is being petitioned to grant some privilege or status. There appear to be some significant differences in the contents of benefits packages between plans with different funding sources. Information was always obtained from respondents on those legal matters which were neither specifically included nor excluded from the benefits packages. Among responses from individual payment plans, this third category contained very consistently low or zero values, suggesting that individual payment plans are far more detailed in explaining what matters are and are not covered. Since there is higher adverse selection associated with individual payment plans, it is reasonable to expect greater care to be taken in defining the coverage available under these plans. Another factor is that Hour Bank plans, which by definition do not specify the legal matters on which the client's hours may be spent, include only a small proportion of individual payment plans. There are other significant differences in the contents of benefits packages between plans with different funding sources-as reported in Table 2.12. For instance, with one exception, individual payment plans provide, on the average, either the same or broader coverage than either employer-funded plans or dues-funded plans. ("Broader coverage" means the inclusion of more legal matters, but does not necessarily mean that the depth of coverage is better. That is, a plan may cover more legal matters, but provide less actual dollar coverage for particular matters or overall.)

Table 2.10.-Legal matters most often included by plans

Table 2.11.-Legal matters most often excluded by plans

Percent

98.6

95.7

94.1

88.6

88.6

88.2

82.9

82.6

80.9

79.7

77.3

75.4

75.4

72.5

69.4

69.1

68.2

56.3

52.6

48.5

11.8

Percent

70.6

36.4

30.9

19.7

19.4

18.8

17.6

17.4

14.5

13.6

13.2

11.6

11.6

10.1

7.1

7.1

5.9

5.7

4.3

1.5

The one area of exception is in coverage provisions for the costs/expenses of litigation, where fewer individual payment plans provide coverage. Table 2.12 displays only those legal problems in which coverage differs by source of funding, showing the percent of plans providing coverage for those specific legal problems.

TABLE 2.12.-BENEFIT COVERAGE DIFFERENCES (ONLY) BY SOURCE OF FUNDING

TABLE 2.12.-BENEFIT COVERAGE DIFFERENCES (ONLY) BY SOURCE OF FUNDING-Continued

1 The small number of cases in this category produces less reliable figures. Cell sizes were too small to yield reliable data for other sources of funding.

An examination of the breadth of coverage by delivery system produced reliable data only for open and closed panel plans. By a small margin (an average of less than 8 percentage points) open panels appeared to provide broader coverages than closed panels. The areas of major differences were in bankruptcy, tax representation and costs/expenses. In bankruptcy, 86.7 percent of open panel plans provided coverage as compared with 67.7 percent of closed panels. Seventy-nine percent of open panel plans indicated they provided coverage for tax representation while only 29 percent of closed panels indicated that they did so. Also, 70 percent of open panels provided coverage for the costs and expenses of litigation as compared with 51.7 percent for closed panels.

As for extent of coverage, the plans split fairly evenly on whether the benefits are subject to a ceiling on the total dollar amount of usage available per member per year. Those using a dollar ceiling comprise 47.2 percent of different plan types. Plans may use hourly or service limitations (i.e., five legal matters per year) instead of dollar ceilings. The fact that 52.8 percent of plans do not use dollar ceilings does not mean that plan benefits are unlimited. The mean size of the dollar ceiling for all plans using them is $2,947. A breakdown of mean size of the dollar ceiling by plans funding types is as follows:

There is no sufficient data to determine a mean dollar ceiling for the employee association plans.

A note of caution is warranted in the conclusion that may be drawn from the dollar ceilings about the general level of benefits within categories of plans. Plans may utilize a variety of limitations and restrictions so that the dollar ceiling becomes relevant only under certain circumstances. For example, a plan may have a ceiling of $10,000 dollars on felony murder cases, and $2,000 on all other types of cases. For another example, two plans may have the same dollar ceiling, $5,000, but one may provide litigation coverage only in defense matters and another may also include selective plaintiff coverage. Dollar ceilings, therefore, are only one indicator of the extent of coverage.

Limited information is available on the use of copayments and deductibles by the plans. Forty percent of the plans do utilize copayments or deductibles. Their use is spread very evenly across plans of different funding sources. The legal matter category most often involving a copayment or a deductible is court representation. The mean size of the copayment or deductible for this benefit is $25/year.

2.6 Eligibility for plan coverage

In this section and the previous section (Section 2.5) no effort has been made to weight for plan clusters. The use of the term "plan" is this section refers to different plan types, and is not weighted for multiple plans of a similar type. Plan eligibility provisions differ considerably depending on the type of organization sponsoring the plan or plan funding type. Eligibility provisions tend to be broader for plans forming part of a wage compensation package than for plans forming part of a package of membership services. Additionally, plans provided on an individual enrollment basis tend to have fairly generous provisions. Of course, individual payment plans which are not marketed in an employment context have virtually no eligibility restrictions; any person is eligible for service benefits who pays the premium. In the construction of Table 2.13 certain individual payment plans have been excluded for this reason.

Table 2.13 reports eligibility information on five different categories of potential covered persons by source of funding of the plan. In addition to the principal covered employee or member, a smaller number of plans also extend full or partial coverage to part-time employees. The high percentage of employee association plans funded through general revenues_extending eligibility to part-time employees is somewhat anomalous and may reflect the small number of cases in the category. TABLE 2.13.-PLAN ELIGIBILITY PROVISIONS BY SOURCE OF FUNDING

A fourth to one-third of all plans reporting extend eligibility for benefits to retirees.

The high proportion of individual payment plans extending eligibility to retirees is understandable; membership in the plan would be extended equally to active and retired employees since the employee is responsible for making payment to the plan.

Employer-funded plans universally extend coverage to spouses and dependents. (It was discovered that there is no difference in treatment between spouses and dependents and therefore they are treated as a single category of eligible.) Employee association plans are less likely to provide coverage to spouses and dependents although at least 50 percent do. This may be explained in part by the fact that many of these plans provide employment-related legal services.

Plans were asked whether officers, owners and shareholders were eligible to become members of the plans. It is significant that plans funded unilaterally by employers extend services to these categories of persons more often than do employer plans established through collective bargaining. However, some caution is required because of small frequencies. Employee association plans tend not to cover officers of their organizations.

Only 25 percent of all plans utilize a waiting period before plan members are eligible to use plan services. Individual payment plans were most likely to use waiting periods; 23.7 percent of those plans reported utilizing them.

Table 2.14 provides information about plan termination provisions. As might be expected, the three most common contingencies resulting in termination of plan membership were death, termination of employment, and retirement. Approximately % of all plans extend coverage to members on lay-off for a specific period of time after lay-off. Certain plans which were established in the early to mid 1970's almost universally extended eligibility to the spouse and dependents of a member who had died. Today, a small but still significant number of plans, 16.7 percent, have such a provision. These provisions appear to represent an effort to provide services to members and employees when they are most in need of them; employees on lay-off tend to experience substantial debt problems and widowed spouses experience significant problems associated with probate, real estate, and guardianship.

Type of provision:

Table 2.14.-Termination provisions

Immediately in the layoff of the member...

A specified amount of time after layoff of member.

On retirement of member.........

On termination of member's employment..

On termination of membership in union or employee association.
At death of plan member..
Other..........

2.7 Age and utilization experience of plans

Percent of plans

22.6

19.4

54.8

64.5

25.8

77.4

12.5

Legal service plans have a very recent history. The first real growth in plans occurred only in 1973, and has continued at an increasing rate in succeeding years. Fewer than 8 percent of the plans, all of them funded by either employee associ

ation or individual payment, were established prior to 1973. Using 1980 as a base year, Table 2.15 shows the ages of plans in the study population. (Plans established in 1979 and 1980, 12.8 percent of the study population, were excluded since only a small proportion of the total number of plans established in these years would have been included in the study population.)

Plan ages:

Table 2.15.-Age of plans (base year: 1980)

Percent in age group

32.3

21.2

9.7

16.7

6.1

3.5

9.9

2 years old (established in 1978). 3 years old (established in 1977). 4 years old (established in 1976) 5 years old (established in 1975). 6 years old (established in 1974).

7 years old (established in 1973).

More than 7 years (established prior to 1973).

Table 2.16 reports the total number of plans established by year and by source of funding, grouped by major funding type.

The first employer-funded plans in the study population were established in 1974. These plans comprised more than half of the plans established that year. The year 1975 was the first year showing a substantial increase in the number of individual payment plans. These plans increased from a 25 percent share of plans established in 1974 to better than a 60 percent share of plans established in 1975. They have consistently comprised a large proportion of plans established. As Table 2.16 shows, employer-funded plans have consistently been established at a rate two to three times greater than employee association plans. The number of employer and employee association plans established together only in 1976 has exceeded the number of individual payment plans established. The year 1976 appeared to be a year when fewer plans were established for all categories except employer-funded plans.

TABLE 2.16.-PLANS BY SOURCE OF FUNDING AND DATE ESTABLISHED

Very limited data is available about plan utilization experience. Because the pretests revealed that closed panel plans tend to keep records on the basis of number of cases open and open panels on the basis of number of claims paid, different experience questions were constructed for open and closed panel plans reflecting these major diffrences in recordskeeping. Means were calculated for the number of cases and claims in 1977, 1978 and 1979. In the calculation of mean number cases for closed panel plans, however, there was no control for size of plan and the resultant mean is very large with an extreme positive skew because of the extreme sizes of some of the responding plans. Consequently no meaningful figure is available for the number of cases handled by closed panel plans.