November 19, 2013

Without spending a great amount of time recapping the major headlines of the past few weeks, the search is on for better insurance options.  And, while this search has been topical for some time, recent attention in mainstream media seems to have elevated the healthcare debate to a new level. 

One option that seems to be raising a bit of attention are self-insured plans, the topic of today's newsletter.  Self-insured plans are not new and are fairly common.  As displayed by the Self=Insurance Institute of America - According to a 2000 report by the Employer Benefit Research Institute, approximately 50 million workers and their dependents receive benefits through self-insured group health plans sponsored by their employers. This represents 33% of the 150 million total participants in private employment-based plans nationwide.  NSLIJ recently made headlines when it was approved for a self-insured plan.

So, what is a self-insured plan and should we expect a rise?  A self-insured plan is exactly what it sounds like - a plan where the employer pays for the cost of care.  The employer may administer the plan itself or outsource administration.  For self-insured plans, the employer sets the pricing and terms of the plan, but is required to adhere to certain laws, rules and regulations in administration, as well as funding requirements in its jurisdiction.  Additional information is available here.

Will self-insured plans continue as trend or be part of a path to a better insurance future?  Too early to tell, however, with the rise of Independent Practice Associations in New York, and with accountable care/increased transparency in pricing which is inevitable with changing technology, there are factors in favor of taking the middle man (managed care) out of the equation and possibly allowing looser associations than just employers to organize and self-insure.