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Survey: Self-funded health plans grow in popularity


As organizations begin to assess options for group health coverage in 2018, new data out this week could help provide some perspective. Employer premiums on health care plans rose higher this year than they have in the past five years, according to a new nationwide health plan survey, Benefits Pro reported

Consequently, employers are continuing to pass the costs on to workers and also reducing their prescription drug coverage, according to the 2017 United Benefit Advisors Health Plan Survey. 

Additionally, self-funded plans — in which an employer operates its own health plan, as opposed to purchasing a fully insured plan from an insurance carrier — are also becoming more prevalent. 

Premium renewal rates for employer-sponsored health insurance rose an average of 6.6 percent in 2017, a significant increase from the five-year average increase of 5.6 percent, according to responses from 20,099 health plans and 11,221 employers.

“Premiums have been holding relatively steady the last few years, and while this year’s increases are not astronomical, their departure from the trend does warrant attention,” said UBA President Peter Weber. “To mitigate these rising costs, employers are shifting more premium onto employees, offering more lower-cost consumer directed health plans and health maintenance organization plans, increasing out-of-network deductibles and out-of-pocket maximums, and leveraging continued extensions on the ability to ‘grandmother.’ ”

For all employer-sponsored plans, average employee premiums for single coverage rose 4.5 percent, to $532 from $509 in 2016. Average employee premiums for family coverage rose 3 percent, to $1,272 from $1,236.

Self-funded plans, which have always been an attractive option for large groups, are becoming increasingly desirable to employers as a way to avoid various cost and compliance aspects of health care reform, Weber said. 

The number of employers using self-funding grew 48 percent for employers with 25 to 49 employees in 2017 (5.8 percent of plans), and 13.4 percent for employers with 50 to 99 employees (9.3 percent of plans), the survey found. Overall, 12.8 percent of all plans are self-funded, up from 12.5 percent in 2016, while almost two-thirds (60.9 percent) of all large employer (1,000+ employees) plans are self-funded.

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