Self-Funded Health Plans Grow In Popularity

February 12, 2018  |  Self-Funded
Benefits Connection

- taken from Business Record

As organizations begin to assess options for health coverage in 2018, new data could help provide some perspective. Employer premiums on health care plans rose higher in 2017 than they have in the past five years, according to a nationwide health plan survey, Benefits Pro reported.

Consequently, employers are continuing to pass the costs on to workers and also reducing their prescription drug coverage, according to the 2017 United Benefit Advisors Health Plan Survey.

Additionally, self-funded plans -- in which an employer operates its own health plan, as opposed to purchasing a fully insured plan from an insurance carrier -- are also becoming more prevalent.

Premium renewal rates for employer-sponsored health insurance rose an average of 6.6 percent in 2017, a significant increase from the five-year average increase of 5.6 percent, according to responses from 20,099 health plans and 11,221 employers.

For all employer-sponsored plans, average employee premiums for single coverage rose 4.5 percent, to $532 from $509 in 2016. Average employee premiums for family coverage rose 3 percent, to $1,272 from $1,236.

Self-funded plans, which have always been an attractive option for large groups, are becoming increasingly desirable to employers as a way to avoid various cost and compliance aspects of health care reform.

The number of employers using self-funding grew 48 percent for employers with 25-49 employees in 2017 (5.8 percent of plans), and 13.4 percent for employers with 50-99 employees (9.3 percent of plans), the study found. Overall, 12.8 percent of all plans are self-funded, while almost two-thirds of all large employer plans are self-funded.