Filed Under:Health Insurance, Individual Health

Consultants: Stop-loss use dropped in 2010

Workers were a little less likely to be in self-insured health plans in 2010 than in 2009, but they were significantly more likely to have self-insured coverage than in 2001.

Michael Brien and Constantijn Panis, analysts at Deloitte, have included figures supporting that conclusion in a report on self-insured health plans prepared for the U.S. Labor Department.

Drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) exempted self-insured plans from many PPACA coverage requirements. Then, in response to complaints that policymakers had little information about the state of the self-insured plan market, the PPACA drafters put in a requirement that the Labor Department prepare annual reports on the  self-insured plan market.

The Labor Department has added the Deloitte analysis to the official self-insured market report as an appendix. 

The Deloitte analysts developed their report using the same kind of Form 5500 plan report information available through FreeERISA.com. Federal law requires a plan with 100 or more participants, and a plan of any size that operates a trust, to file a Form 5500 return.

The Deloitte report gives a snapshot of what the self-insured plan market was like before any PPACA provisions had started taking effect.

The analysts found that pure self-insured plans covered 43.9 percent of the U.S. workers included in the Form 5500 data for 2010, down from 44.3 percent in 2009, but up from 38.6 percent in 2001.

The percentage of the employees with fully insured coverage fell to 17.4 percent in 2010, down from 18.1 percent in 2009 and from 25.2 percent in 2001.

The choices of a few giant plans had a huge effect on the figures for new plans in 2010.

The number of new plans that were purely self-insured fell to 30.8 percent, from 32.5 percent in 2001, and down from 43.5 percent in 2001.

But, because some giant plan sponsors chose to mix self-insurance with insurance, the percentage of new-plan participants in self-insured plans plummeted to 29.3 percent, from 42.5 percent. The percentage of new-plan participants in mixed plans jumped to 46.2 percent, from 14.6 percent.

A "mixed-funded plan" is a plan that offers employees a choice between fully insured coverage options and self-insured coverage options.

The analysts also looked at use of stop-loss coverage, or insurance for health insurance plans.

The percentage of purely self-insured plans using stop-loss insurance fell to 27.8 percent, in 2010, down from 28.9 percent in 2009 and from 32 percent in 2001.

The percentage of enrollees in self-insured plans with stop-loss protection dropped to 14.9 percent in 2010, from 16.6 percent in 2009 and from 19.2 percent in 2001.

Median per-participant annual premiums for stop-loss insurance increased to $575, down from $585 in 2009, but up from $378 in 2001.

Only a small percentage of existing plans changed from one type of plan to another.

In 2010, 2.8 percent of the plans that switched shift to a mixed or self-insured plan model, and 1.9 percent shifted to a fully insured model.

The year before, 3 percent of the switchers went with a mixed or self-insured approach, and 2.4 percent chose fully insured coverage.

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