posted on May 29, 2013 15:31
UnitedHealth Group Inc. and Humana Inc. will begin offering smaller employers — including firms with as few as 10 members in UnitedHealth's case — the option of self-insurance in some markets later this year. Self-insured businesses pay their workers' medical costs directly, instead of joining a traditional managed-care plan. Usually, they hire benefits firms or insurance companies just to administer their plans.
Most big companies choose the approach because it gives them more control over benefits and can lower costs. For small businesses, being self-insured would let them avoid new requirements under the law that call for traditional small group plans to include richer benefits, such as mental-health and maternity care. Self-insured companies can also avoid changes to pricing rules that could increase costs for groups of healthy workers.
It comes with risks: a car accident or cancer case can leave small businesses on the hook for big medical bills. That is why most large insurers have generally offered such services to companies that have 100 or more workers and can spread the costs around.
The approach is part of a growing playbook of strategies to minimize the effects — and potential costs — of the Obamacare health law. Insurers are also letting small companies renew their yearlong health benefit plans early, before the end of 2013. That would delay the impact of health law provisions that broadly kick in on Jan. 1, but would only affect plans once they renew after that date.