What if there were a way for even small employers to escape some Affordable Care Act rules blamed for driving up costs? Some see self-insurance for medical care, which is exempt from the law’s taxes, benefit rules and price restrictions taking effect next year, as just such an opportunity.
Self-insured firms finance most worker health costs and buy “stop-loss” reinsurance to cover especially high claims. Self-insurance has typically been the realm of large employers. But Kaiser Health News has reported brisk interest by small companies exploring self coverage. Stop-loss coverage that kicks in as low as $10,000 or $20,000 per worker makes self-insurance an option for firms with as few as 20 or 30 on staff, brokers say. Yet advocates of the law worry that more small firms with young, healthy employees will self-insure next year, exploiting what some see as an ACA loophole and leaving small-group insurance pools with sicker members and higher costs.
Regulators have little information about what’s going on, says a new study from the Robert Wood Johnson Foundation and the Urban Institute. If self-insurance takes off among small companies, the information gap could make states slow to react to keep their small-group markets viable.
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Source: Kaiser Health News