A couple of years ago, as many smaller employers were first beginning to think long and hard about how they would fare under the Affordable Care Act, benefit advisers and industry experts talked a great deal about the pros and cons of self-insuring their health benefits. Self-insurance is, of course, less common among smaller employers than among large ones (see Table 1). For example, only 16% of workers in companies with fewer than 200 employees were covered by partially or fully self-insured plans last year, versus 94% working at companies with at least 5,000, according to Kaiser Family Foundation research.

Benefit advisers should remember that the traditional, pre-ACA potential benefits of self-insuring — including avoiding state-mandated benefits and possible cost reductions — will be supplemented by some new ones thanks to the health law.

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