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Whales, Minnows Swim in Different Health Plan Waters: EBRI

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Small U.S. employers may be more likely to self-insure their health plans than they were before the major Affordable Care Act programs and rules came to life, but larger employers may be less likely to self-insure their health plans.

Paul Fronstin, an analyst at the Employee Benefit Research Institute (EBRI), has posted charts suggesting that possibility based on federal government survey data collected from 1996 through 2016. Fronstin included the charts in a report on trends at self-insured health plans.

(Related: EBRI: Self-Insured Plans Continue to Gain Share)

A copy of the report is available here.

The percentage of all private-sector establishments that offer at least one self-insured health plan increased to 41% in 2016.

That’s up from 39% in 2015, and up from 37% in 2014, when most ACA benefits and underwriting rules for small health plans took effect.

The lowest self-insurance rate recorded since 1996 occured in 1999: In 1999, just 26.5% of employers self-insured their health plans.

But Fronstin found that recent self-insurance rate trends look much different for employers with 500 or more employees, employers with 100 to 499 employees, and employers with fewer than 100 employees.


For the smallest employers, self-insurance rates have bounced between about 12% and 14% in most years since 1996.

Since the ACA small-group rules rolled in, in January 2014, the small-group self-insurance rate moved from 13.4% in 2014, to 14.2% in 2015, to 17.4% in 2016.


For employers with 100 to 499 employees, the 1996 self-insurance rate was 35%.

Midsize employers’ self-insurance rate drifted lower over the years and settled at around 25% from 2011 through 2013.

The midsize employers’ self-insurance rate rose to 26% in 2014, and to 30% in 2015, but then fell to 29% in 2016.


Self-insurance rates for the biggest employers bounced between 75% and 85% from 2000 through 2013.

The largest employers’ self-insurance rate fell to 81% in 2014, to 80% in 2015, and to 78% in 2016.


Agents, brokers, benefits, consultants, and regulators who support the ACA have predicted that small employers would try to make more use of self-insurance, to escape from the cost of complying with the ACA small-group rules.

Other factors that may be shaping employers’ decisions about self-insurance could include availability of better health plan administration systems, and of better and more actively marketed risk-management programs for smaller self-insured health plans.

Still another factor could be the rise of private exchange programs.

If, for example, some large and midsize employers that were self-insured in 2015 shifted to private exchange programs that offered fully insured health plans, that may have reduced the 2016 self-insurance rates for large and midsize employers.

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