Source: Benefits Pro
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Roughly 40% of employers with three to 99 employees are escaping from the fully insured small-group health insurance market by using level-funded plans, an analyst told state insurance regulators earlier this month in Denver.
In 2018, fewer than 10% of small firms had level-funded health plans, according to Kelly Edmiston, policy research manager at the National Association of Insurance Commissioners’ Center for Insurance Policy and Research.
The designers of a level-funded plan set it up as a self-insured health plan operating under the Employee Retirement Income Security Act. The employers usually buy stop-loss insurance, or insurance of health plans, with low “attachment points,” or low stop-loss deductibles.
Thanks to the stop-loss insurance, “small employers are often protected from any meaningful additional liability,” Edmiston told the regulators. But, because the employer classifies the plan as a self-insured plan, the employer can avoid complying with state benefits mandates, Edmiston said.
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