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.


"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.