The past decade has ushered in an era of growth for the self-funded, or administrative services only (ASO), health care market. In fact, more than 60 percent of all the employers in the U.S.
today self-insure their employee medical benefits, and
the self-insurance rate is poised to grow even more.
Among self-funded options, employer stop loss
(ESL) insurance has proven particularly attractive.
According to a white paper from RGA and Milliman released in May 2019, the ESL market has nearly tripled
over the past decade, growing from approximately $7
billion in premium in 2008 to more than $21 billion in
2018. As this growth has occurred, a significant share
of it has accrued to health plans rather than tradition-
al ESL carriers. In 2006, health plans represented one-
third of the ESL marketplace; that market share grew
to nearly 60 percent in 2018.
A majority of this growth has been concentrated in
large national health plans (such as United, Cigna and
Aetna) where the ESL market share has more than
doubled, from 16 percent to 33 percent. Market share
for Blue Cross Blue Shield (BCBS) organizations (
including multi-state groups such as Anthem or Health
Care Services Corporation and single-state Blues
plans) is around 18 percent, having peaked at 23
percent in 2012. Meanwhile, the market share of other
regional or smaller plans has remained quite steady at
5 percent to 7 percent.
This latter group of regional plans could represent
the biggest opportunity for growth moving forward. It
By David Sipprell and Tom Nicholson
If you’re considering joining the growing self-insurance
movement, here are some key factors to keep in mind.
