EBRI Issue Brief
Trends in Self-Insured Health Plans: Overall Trends Mask Differences by Firm Size
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.
- 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.