Study: Self-insured health plans on the rise for private-sector employers

Private-sector employers are increasingly choosing self-insured health plans to cover their employees, according to a new study.

The nonpartisan Employee Benefit Research Institute (EBRI) found that about 6 in 10 private-sector workers were covered by self-insured plans in 2011, up from about 4 in 10 in the late 1990s.

Researchers predicted the trend may continue as employers look for ways to save money on their healthcare coverage.

{mosads}”Employers generally, and small employers particularly, concerned about the rising cost of providing health coverage may view self-insurance as a better way to control expected cost increases,” said EBRI’s Paul Fronstin, who wrote Wednesday’s report.

“This new analysis provides a baseline against which to measure future trends.”

EBRI noted that some employers expect cost increases as a result of the Affordable Care Act’s new coverage requirements, and may turn to self-insured plans for that reason.

Massachusetts, the firm found, has seen an increase in the share of workers covered by self-insured plans. The Bay State implemented a reform similar to the Affordable Care Act in 2006.

In offering a self-insured plan, an employer assumes the financial risk associated with healthcare coverage for its workers rather than transferring that risk to an insurance company.

Large employers are often in a better position to self-insure, and have driven the wider trend toward self-insured plans over the last decade, according to EBRI.