EBRI Issue Brief

Trends in Self-Insured Health Plans: Overall Trends Mask Differences by Firm Size

Aug 24, 2023 9  pages

Summary

Since the passage of the Patient Protection and Affordable Care Act of 2010 (ACA), there has been much speculation that an increasing number of small and medium-sized employers would convert their health plans from fully insured to self-insured plans. The rationale has been that several of the key ACA components — creditable coverage, affordability, essential benefits, and various taxes and fees — would drive up the cost of health coverage, thus possibly making self-insurance, which is viewed by many as generally less expensive than fully insured alternatives, a more attractive option for many employers. Self-insurance would become an increasingly attractive option mainly for small and medium-sized employers, as fewer of them were self-insured in 2010, whereas many large employers were already offering self-insured health plans at that time.

What has happened to the availability of and enrollment in self-insured health plans since passage of the Patient Protection and Affordable Care Act of 2010 (ACA)? Using data from the Medical Expenditure Panel Survey - Insurance Component (MEPS-IC), this paper examines trends in offerings and utilization, with a particular focus on the time period from 2010 to 2022.

Key findings:

  • The percentage of private-sector establishments offering a self-insured health plan increased through 2016 but has since ebbed and flowed with no discernible long-term trend.
  • Recent trends have been more clearly defined when examined by firm size.
  • Since 2018, the percentages of small and medium-sized establishments offering at least one self-insured plan both increased. In contrast, the percentage of large establishments offering a self-insured plan has declined. The decline among large establishments occurred in most years since 2013.
  • Overall, the percentage of workers in self-insured plans has been bouncing around between 58 percent and 60 percent since 2010 but fell to 55 percent in 2022. This occurred despite the increase in self-insurance among small and medium-sized companies because of the drop in self-insurance among large firms.
  • Self-insurance varied substantially by state. Overall, the percentage of private-sector enrollees in self-insured plans varied from 33 percent in Hawaii to 70 percent in Ohio.