Self-insured health plans are gaining popularity and are likely to increase this momentum because of the Patient Protection and Affordable Care, according to a new report by EBRI.
This kind of plan ensures that the employer assumes the financial risk related to health insurance. Another option is the fully insured plan, where the insurance company is paid to take the risk.
In 2011, 58.5 percent of workers with health coverage used self-insured plans, up from 40.9 percent in 1998.
In the past, large employers—with more than 1,000 employees—have been more likely to self-insure than small employers because there are more incentives for them to do so, according to the report. These large employers can provide uniform health benefits if they self-insure and they are also not required to cover state-mandated health care services, as they are with fully insured plans.
After the passage and implementation of the Patient Protection and Affordable Care Act, or PPACA, it is expected that more, smaller employers will choose self-insurance because the new act’s components including:
Grandfathering requirements, the minimum-creditable-coverage requirement, the breadth of essential health benefits, affordability requirements, as well as taxes on insurers, medical-device manufacturers, and pharmaceutical companies and reinsurance fees will work to drive up the cost of health coverage.
The report also cites numbers from Massachusetts, so far the only state to have enacted health reform similar to PPACA, which has seen an increase in the self-insured plans among all business sizes, save those with fewer than 50 employees.
Source:
http://healthcare.dmagazine.com/2012/11/29/self-insured-health-plans-gain-momentum/