By Tom Curry National affairs writer
updated 1/26/2010 10:28:16 AM ET 2010-01-26T15:28:16

Claim: Self-insured employer health plans would be largely unaffected by the insurance reform.

In a self-insured plan, the employer acts as its own insurer, using money that it would have paid an insurance company and paying the medical claims filed by its employees. According to the Employee Benefit Research Institute (EBRI), more than 70 million workers, or 55 percent of workers with health insurance, were covered by a self-insured plan in 2008. Nearly nine out of ten workers employed by large firms (those with 5,000 or more employees) were in such plans. One advantage for companies that self insure: they can tailor coverage to their particular workforce and, as a 2008 EBRI report said, "design financial incentives, such as deductible and co-payment structures, that encourage wise use of health benefits." Would the Democrats' reform bill change this?

Fact or fiction?
Unclear. The House would apply new regulations to self-insured plans that the Senate would not. The House bill's specification of a minimum benefits package -- what types of medical services must be covered -- would apply to self-insured plans. The Senate bill does not have this requirement. Self-insured plans would have to pay the Senate bill's new tax on high-cost plans, but the Senate exempts self-insured plans from its annual fee on insurance providers. (Cost of those fees: $60 over 10 years.) The House and Senate bills require that premiums charged to older people be no more than two times (House bill) or three times (Senate bill) larger than those charged to younger ones. State insurance commissioners say the ratios would have the unintended consequence of encouraging some businesses to self-insure in order to evade the age rating rule.

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