Small and medium-sized employers are more likely to offer self-insured health plans than are larger companies, according to a research report published this week by the Employee Benefit Research Institute.
Since 2018, according to the EBRI, the percentages of small and medium-sized businesses offering at least one self-insured plan increased and the percentage of large establishments offering a self-insured plan has declined. In fact, the decline among large establishments occurred in most years since 2013.
Overall, the report, titled “Trends in Self-Insured Health Plans: Overall Trends Mask Differences by Firm Size,” found that the availability of self-insured health plans among various sized employers, from 2010 to 2022, sometimes has increased and other times has decreased.
“The data in large part is consistent with the perspective that the Affordable Care Act has caused more small and medium-sized employers to convert to self-insured plans,” the report authors said. The data come from the Medical Expenditure Panel Survey – Insurance Component.
“Since the passage of the ACA, there has been speculation that an increasing number of small and medium-sized employers would convert health plans from fully insured to self-insured plans, joining the many large employers that already offer self-insured health plans,” said Paul Fronstin, PhD, director of health benefits research at EBRI. “The rationale has been that several of the key ACA components — creditable coverage, affordability, essential benefits, taxes and fees — would drive up the cost of health coverage and as a result possibly making self-insurance a more attractive option for many employers.”
The report found that approximately 58% to 60% of workers have been covered by self-insured plans since 2010, although the percentage fell to 55% in 2022. Self-insurance varied “substantially” by state, according to report authors, with 70% of Ohio residents being enrolled in private-sector self-insured plans versus 33% of Hawaii residents. “This is likely due to differences in state laws related to regulation of fully insured plans and characteristics of employers in that state,” the authors said.
An issue brief is available for download online.
