US Department of Labor releases Affordable Care Act study on self-insured plans

WASHINGTON - The U.S. Department of Labor today transmitted to Congress the third annual report on self-insured employee health benefit plans. The report, which is established by the Affordable Care Act, contains general information on self-insured employee health benefit plans and financial information on the employers that sponsor them.

Self-insured plans, unlike fully insured plans, are generally plans in which the sponsor retains the risk associated with paying covered health expenses, rather than paying a premium and transferring the risk to an insurance company. Some sponsors retain the risk for a subset of the benefits, but transfer the risk for the remaining benefits to health insurers – that is, they finance the plans' benefits using a mixture of self-insurance and insurance. Self-insurance is more common among larger sponsors, mainly because the health expenses of larger groups are more predictable and therefore larger sponsors face less risk.

This year's report utilizes a revised algorithm to identify self-insured plans from those that are fully-insured or use a mixed funding arrangement. These revisions, based on a study of Form 5500 filings, indicate that previous reports overstated the number of fully insured and mixed-funded health plans and identified too few self-insured plans. Consequently, this report is not directly comparable to its predecessors and should not be used with them to project trends in health insurance funding. Rather, estimates presented in the 2013 report should be viewed as the department's best estimates of plan funding arrangements for 2010 and earlier years.

Health benefit plans covering private-sector employees must file a Form 5500 Annual Return/Report of Employee Benefit Plan – generally, if they cover 100 or more participants or hold assets in trust. This report includes information on self-insured and mixed-insured health benefit plans that are required to file a Form 5500 and presents data on such plans for 2010, the latest year for which complete data are available. The department estimates that nearly 20,000 health plans filing a Form 5500 for 2010 were self-insured and approximately 4,000 were mixed-insured. These plans covered 30 million and 26 million participants respectively. However, because many self-insured health plans do not meet the filing requirements and therefore do not file the Form 5500, this report likely underestimates the total number of self-insured plans.

The full report can be found on the department's Employee Benefits Security Administration Affordable Care Act page, or at http://www.dol.gov/ebsa/healthreform/index.html#5.

U.S. Department of Labor news materials are accessible at www.dol.gov. The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling 202-693-7828 or TTY 202-693-7755.