Changes in Self-Insured Coverage for Employer-Sponsored Health Insurance: Private Sector, by Firm Size, 2001-2011

In the context of employer-sponsored health insurance coverage, a self-insured plan is one for which the employer has chosen to assume the financial risk for the enrollees' medical claims under the plan either partially or entirely. Employers with a self-insured plan commonly purchase stop-loss coverage from a reinsurer who agrees to bear the risk (or stop the loss) for those expenses exceeding a predetermined dollar amount. Some self-insured employers contract with an insurance company or third party administrator for claims processing and other administrative services. Employers may offer both self-insured and fully insured plans (where the employer contracts with another organization-such as a health insurance company or HMO-to assume financial responsibility for the enrollees' medical claims and for all incurred administrative costs). From the enrolled employees' point of view, the employer's method of funding their health insurance benefits is transparent. All types of plans (including conventional indemnity, PPO, and HMO) can be financed on a self-insured basis. So employees offered a choice among plans do not "choose" a self-insured plan, but rather the type of coverage that they want given the plans offered. This Statistical Brief examines offers of and enrollment in self-insured coverage in the private sector. It contrasts overall changes in employer-sponsored health insurance with changes in self-insured coverage for 2001 compared to 2011. The analysis covers differences between private sector employers by firm size-fewer than 10 employees, 10 to 24 employees, 25 to 99 employees, 100 to 999 employees, and 1,000 or more employees-during the period. Only those differences that are statistically significant at the 0.05 significance level are discussed.