NEW YORK—U.S. small businesses have not followed the same path of bigger firms by starting to self-insure their medical benefits to avoid the costs of the Affordable Care Act (ACA), according to recent research findings by the nonprofit Employee Benefit Research Institute (EBRI).

Since the ACA’s enactment in 2010, there has been speculation that the law will result in an increasing number of smaller employers offering self-insured plans, according to an article titled, Self-Insured Health Plans: State Variation and Recent Trends by Firm Size, published in the June 2015 EBRI Notes. The study looked at self-insurance through 2013, the last year for which data was available.

The analysis found that the overall percentage of American workers in self-insured plans has been increasing in recent years compared to the pre-ACA time period. In 2013, 58.2 percent of workers with health coverage were in self-insured plans, up from 40.9 percent back in 1998. However, the percentage of workers in self-insured plans in firms with fewer than 50 employees has been close to 12 percent in most years examined in the analysis going back to 1996.

As of 2013, among U.S. employers 37.6 percent used at least one self-insured health plan. By company size, the breakdown was as follows:

• 500 or more employees: 83.9 percent.

• 100 to 499 employees: 25.3 percent.

• Fewer than 100 employees: 13.3 percent.

• Fewer than 50 employees: 13.2 percent.

The overall percentage of workers in self-insured plans as of 2013 varied among the states, from an overall low of 35.5 percent to a high of 73.5 percent:

• Hawaii (at 35.5 percent) was the only state with fewer than 40 percent of workers with health insurance in self-insured plans.

• In four states (California, Massachusetts, New York and Rhode Island) and the District of Columbia, between 40 percent and 50 percent of workers with health insurance were in self-insured plans.

• Only two states (Indiana and Nebraska) had more than 70 percent of workers with health insurance in self-insured plans.

As is often the case, these trends change, either because of changes in legislation or because of business circumstances. We will continue to keep you appraised as changes arise.

Hedley Lawson, Contributing Editor
Managing Partner
Aligned Growth Partners, LLC
(707) 217-0979
hlawson@alignedgrowth.com
www.alignedgrowth.com