Small, mid-sized companies moving away from fully-insured plans for workers

Employees in small and mid-sized companies are increasingly self-insured, a recent study found.

Between 2013 and 2015, the proportion of mid-sized companies with 100 to 499 employees that were self-insured increased from 25.3 percent to 30.1 percent, according to the study published in July by the Employee Benefit Research Institute. The proportion of small companies with fewer than 100 employees that were self-insured increased from 13.3 percent to 14.2 percent. In contrast, self-funding by large companies decreased from 83.9 percent to 80.4 percent.

The study also found the percentage of private-sector companies offering at least one self-insured health plan increased by 36.8 percent in the past decade — from 28.5 percent in 1996 to 39 percent in 2015.

Additionally, the percentage of workers enrolled in self-insured health plans increased from 58.2 percent in 2013 to 60 percent in 2015, according to the study. The largest increases in self-insured plan coverage among covered workers occurred among companies with 25 to 99 employees and with 100 to 999 employees.

Paul Fronstin, PhD,director of EBRI's health research and education program, said these findings are in line with what some commentators have speculated since the passage of the Affordable Care Act. He said commentators believe several of the key ACA components — creditable coverage, affordability, essential benefits and various taxes and fees — would drive up the cost of health coverage, thus possibly making self-insurance a more attractive option for many employers.

The study included survey results from nearly 40,000 employers that participated in the U.S. Census Bureau's Medical Expenditure Panel Survey Insurance/Employer Component.


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