Insurer Sees Small Employers Dropping Health Coverage, Shifting to Self-Insured

As the nation prepares to roll out the next phase of the ACA, the second biggest medical insurer - Wellpoint - said that it expects to lose members in health insurance plans sponsored by smaller employers. At the same time, the company expects membership gains in self-insured employer plans and in the kind of individual plans that will be sold in the public exchanges starting Oct. 1.

The lost customers aren’t just signing up with WellPoint rivals; some of it is going into the uninsured ranks. The Obama administration recently postponed enforcement of a requirement that employers with 50 employees or more offer health coverage next year or face fines. But the delay in the “employer mandate” wasn’t the reason WellPoint gave for losing small-group members. Nor did executives respond directly to analyst’s questions about whether small employers are “dumping” workers into the subsidized individual market. Rather, small employers have hesitated to buy coverage for next year because of uncertainties surrounding the online exchanges offering individual and small-group plans, the company said.