Employers seek more flexibility in designing a plan suitable for their employees. The self-insured are not immune, however, from the effects of the healthcare reform debate.
More employers are moving to self-funded healthcare insurance and the trend is likely to continue as they seek health plans that satisfy their employees more than the commercial options currently available under the Affordable Care Act, says an industry insider.
Dissatisfaction with the offerings of commercial health plans is encouraging a steady migration of employers to the self-insurance option, says Mike Ferguson, CEO of the Self-Insurance Institute of America. Rather than paying the insurance company a premium to take the annual risk on the healthcare costs of its employees, the company assumes the risk and pays the bills directly.
“Over the years there has been a slow but steady increase in the number of employers moving to self-funded plans, and the reason for that is that they can better take advantage of some cost saving opportunities and also customize the plans to the needs of their work force,” Ferguson says.