DOL review of group health plan filings shows decline in percentage of self-insured

The U.S. Department of Labor (DOL) has released to Congress its seventh annual report on self-insured group health plans, with data from Form 5500, Annual Return/Report of Employee Benefit Plan, as well as data from certain financial filings of self-insured employers. Although the number of Form 5500 filings increased in 2005-2014, the fraction self-insured or mixed-insured plans declined during that period.

The IRS and the DOL developed Form 5500 for employee benefit plans to satisfy annual reporting requirements under ERISA and the Tax Code. The Patient Protection and Affordable Care Act (ACA) generally requires the DOL to prepare an annual report about self-insured group health plans filing Form 5500. Generally, sponsors of self-insured plans pay their plans’ covered health expenses directly, as the plans incur claims.

2014 data. The DOL noted that approximately 20,000 self-insured group health plans filing a 2014 Form 5500 were sponsored by a single employer, whereas some 1,100 plans were multiemployer plans. Moreover, self-insured group health plans filing Form 5500 covered approximately 33-million participants; 29 million of whom were active participants.

Plans covering a large number of participants were more likely to be self-insured than were plans with fewer participants. Fifty-two percent of plans were fully insured, but only 17% of participants in plans filing Form 5500 were covered by those plans.

Thirty percent of the approximately 3,500 new health plans filing a 2014 Form 5500, were self-insured group health plans, three percent were mixed-insured, and 67% were fully insured. Thirty-four percent of participants in these new plans were covered under a self-insured group health plan, 35% were in a mixed-insured plan, and 31% were covered by a fully-insured plan.

The report also states that 3,300 of the mixed-insured group health plans filing a 2014 Form 5500 were sponsored by a single employer, and approximately 500 plans were multiemployer plans. About 48,000 group health plans filed a Form 5500 in the years 2005-2014, with the number of plans filing a Form 5500 increasing over this period. However, the fraction of group health plans that were self-insured or mixed-insured declined from 54% in 2005 to 48% in 2014.

Incomplete data. The DOL cautions that data in the report should be interpreted with care for several reasons, including the fact that, of the self-insured plans that filed a Form 5500 in 2014, 77% did not report their financial information, so the data may be incomplete. Also, plans providing several types of welfare benefits may report health benefits, along with such benefits as disability or life insurance, on a single Form 5500, making it difficult to determine how different benefits are financed, and if the plan is self-insured or fully insured.

The DOL also states that, of the 21,200 self-insured group health plans in 2014, health benefits alone were offered by 4,600 and other benefits in addition to health benefits were offered by about 16,600 plans.

SOURCE: “DOL Annual Report to Congress on Self-Insured Group Health Plans,” March 2017.

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