Factors Affecting Self-Funding by Small Employers: Views from the Market
Document date: April 05, 2013
Released online: April 05, 2013
Policy experts predict that small employers, especially those with younger and healthier employees, will increasingly establish “self-funded” health plans, leaving the traditional fully insured market to obtain lower premiums and avoid market reforms under the Affordable
Care Act. Through interviews with stakeholders in 10 study states, this paper describes factors that may in¬fluence whether and how extensively this change occurs. It also shows that states have minimal data on this potentially growing market, but they would be well served to improve their monitoring efforts so they can identify any increases in small group self-funding and resulting adverse selection, and respond appropriately.
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