Large Firms Drive Self-Insured Plan Growth

November 28, 2012 ( Large-size private-sector employers are driving a trend toward more “self-insured” health plans, according to an EBRI report.

In 2011, 58.5% of workers with health coverage were in self-insured plans, up from 40.9% in 1998. To date, large-size employers (with 1,000 or more workers) have driven the upward trend in overall self-insurance. The number of workers in self-insured plans in firms with fewer than 50 employees has remained close to 12% in most years examined.    

Massachusetts, the only state to have enacted health reform similar to the Patient Protection and Affordable Care Act (PPACA), has seen an increase in the percentage of workers in self-insured plans among all firm-size cohorts, except among workers in firms with fewer than 50 employees.   

EBRI explained that among employers that offer health coverage to their workers, there are two basic types of insurance plan:   

  • A self-insured plan, in which the employer assumes the financial risk related to health insurance; and 
  • A fully insured plan, in which an insurance company is paid to assume the risk.  


Historically, large firms have been far more likely to self-insure than have been small ones, the report notes, and there are significant incentives for them to do so. First, large-size multi-state employers can provide uniform health benefits across state lines if they self-insure (lowering administrative costs) and also are not required to cover state-mandated health care services, as are fully insured plans.  

The report, “Self-Insured Health Plans: State Variation and Recent Trends by Firm Size,” is online at