EBRI Study: Increase in Self-Insured Private Sector Employers

Self-insured health plans are on the rise among private-sector employers, the Employee Benefit Research Institute (EBRI) said in its recent study. The trend may be seen as a sign that employers are increasingly sensitive to cost concerns, and those sensitivities might continue as the Affordable Care Act is implemented, noting that Massachusetts has seen an increase in the share of workers covered by self-insured plans since implementing its own healthcare reform bill in 2006.

The percentage of workers in self-insured plans has been increasing nationwide. In 2011, 58.5 percent of workers with health coverage were in self-insured plans, up from 40.9 percent in 1998. For the most part, the percentage of workers in self-insured plans increased consistently between 1998 and 2011. Larger employers are more likely to offer self-insured health plans. In 2011, 68.5 percent of workers in firms with 50 or more employees were in self-insured plans, whereas only 10.8 percent of workers in firms with fewer than 50 employees were in self-insured plans. Large employers drove the upward trend in overall self-insurance, with the percentage of workers in self-insured plans in firms with 50 or more employees increased from 48.4 percent in 1998 to 68.5 percent in 2011. In contrast, the percentage of workers in self-insured plans in firms with fewer than 50 employees was close to 12 percent in most years of the survey, though it peaked at 18.1 percent in 1997 and reached a low of 10.8 percent most recently in 2011.

Understanding the trend in self-insurance for employers with 50 or more workers and those with fewer is important because the employer mandate in the ACA only affects employers with at least 50 workers. However, other aspects of the law that are expected to drive up health insurance costs will affect employers of all sizes.