Factors Affecting Self-Funding by Small Employers: Views from the Market

Research Report

Factors Affecting Self-Funding by Small Employers: Views from the Market

Abstract

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 influence 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.

Research Area: 

Centers

To reuse content from Urban Institute, visit copyright.com, search for the publications, choose from a list of licenses, and complete the transaction.