The passage of the 2010 Patient Protection and Affordable Care Act (‘ACA’) has created a paradigm where companies with fewer than 500 full-time equivalent (‘FTE’) employees may realize substantial benefits by replacing their fully insured medical benefits with self-insured health benefit plans.
The ACA changes the fully insured market substantially beginning in 2014, but many of the changes do not apply to self-insured plans. Today, 83.9% of private-sector employers with 500+ FTE employees are already self-insured so the impact of the increased risk sharing under the ACA will be particularly acute in the 100-499 and the 50-99 FTE employee segments, as only 25.3% and 13.3% of these companies were self-insured as of 2013, respectively1.
The result will be a risk pool that must be funded by the collective premiums of the remaining 50-499 FTE private-sector employers in the fully insured health market.
Cook Group Solutions specializes in administering the health benefits and providing medical stop-loss insurance for private-sector employers transitioning from fully insured benefits to self-insurance.
1. Source: Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends. 2013 Medical Expenditure Panel Survey-Insurance Component.