In recent years, some brokers, insurers, regulators and others have talked about the possibility that more small employers might be self-insuring
, in an effort to escape from state small-group insurance requirements, and from some Affordable Care Act requirements that affect only fully insured groups.
Critics argue that access to self-insurance hurts the market for fully insured group health coverage, by pushing the employers with the youngest, healthiest workers to cut costs by self-insuring
Among large employers, the number was even higher, with 82% of workers self-insuring
at companies with more than 200 employees (Katie Thomas, "Self-Insured Complicate Health Deal," New York Times, Feb.
BP understands its own operations better than any insurance company, and therefore has a comparative advantage in self-insuring
catastrophic losses using its equity cushion.
As an alternative to self-insuring
, buy policies with increased levels of self-insurance.
Here's what you need to know about self-insuring
Formulas for premium calculation involve everything from unit or payroll auditing to reserve verification, and can be quite complicated, another task for the commercial entity that wishes to save money by self-insuring
Assess the pros and cons of joining the purchasing groups or self-insuring
The ongoing challenges of health care delivery costs and the more recent obstacles and opportunities created by health care reform have made it attractive for more companies to consider self-insuring
their benefits programs," said Lawrence Daurelle, President and CEO of Reliance Standard.
The Obama administration and some Democrats in Congress have been working on efforts to discourage small employers from self-insuring
, to hold traditional group health insurance premiums down by keeping good risks in the fully insured market.
The most obvious benefit to complete self-insurance is the immediate cash flow savings the self-insuring
company realizes by not paying premiums at the beginning of the coverage period.
Scores of companies have switched to self-insuring
as a cost containment measure.