“Self-Insured Health Plans: State Variation and Recent Trends by Firm Size, 1996-2013,” and “Auto-IRAs: How Much Would They Increase the Probability of 'Successful' Retirements and Decrease Retirement Deficits? Preliminary Evidence from EBRI’s Retire ..
Jun 17, 2015, 00:00 AM
Self-Insured: Will small businesses follow the lead of bigger firms and start self-insuring their medical benefits to avoid the costs of the Patient Protection and Affordable Care Act (PPACA)? So far (up to 2013, the latest data available), there is no evidence that they are doing so, according to new research by EBRI.
Auto-IRAs: If “automatic IRAs” (individual retirement accounts) were made universal, how significant could their impact be for increasing retirement readiness and reducing the national retirement savings deficit? That depends largely on age, the default contribution rate and the opt-out rate (the percentage of eligible employees who choose not to participate), according to new research by EBRI.
“Self-Insured Health Plans: State Variation and Recent Trends by Firm Size, 1996-2013,” and “Auto-IRAs: How Much Would They Increase the Probability of 'Successful' Retirements and Decrease Retirement Deficits? Preliminary Evidence from EBRI’s Retire ..
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Vol. 36, No. 6
Self-Insured Health Plans: State Variation and Recent Trends by Firm Size, 1996?2013
- Federal law provides the legal framework for the uniform provision of benefits by multistate employers to self-insure (or directly fund health care expenses of workers) in order to offer consistent health benefits across states, which results in ease of administration and lower expenses. Self-insured plan sponsors are also not required to cover health care services for state-mandated benefits. In contrast, fully insured plans—plans offered by employers where a premium is paid to an insurance company—are required to cover state-mandated benefits.
- This analysis finds that the percentage of workers in self-insured plans has been increasing. In 2013, 58.2 percent of workers with health coverage were in self-insured plans, up from 40.9 percent in 1998. Large employers (with 1,000 or more workers) have driven the upward trend in overall self-insurance.
- There is concern that passage of PPACA will result in an increasing number of smaller employers offering self-insured plans. However, as of 2013, there is no evidence that smaller firms were increasingly self-insuring their health plans.
Auto-IRAs: How Much Would They Increase the Probability of “Successful” Retirements and Decrease Retirement Deficits? Preliminary Evidence from EBRI’s Retirement Security Projection Model®
- This study analyzes the potential of a generic auto-IRA proposal to increase the probability of a “successful” retirement and decrease retirement deficits.
- Assuming no opt outs, this analysis finds that the introduction of an auto-IRA for households currently ages 35?39 working for small employers, would increase the probability of a “successful” retirement (as measured by the Retirement Readiness Ratings, or RRR) by 8.4 percent, declining as employer size increases. Even in the worst-case scenario (75 percent opt out) there was an increase in RRR, albeit only 2.2 percent for those working for small employers and 1.1 percent for those with large employers.
- Among all families where the head is ages 35–64, the aggregate national retirement deficit (in 2014 dollars) decreases from $4.13 trillion without auto-IRAs to $3.86 trillion (or a 6.5 percent decrease) with auto-IRAs and no opt outs. As opt-out rates rise, there is progressively less reduction in the aggregate deficits; at a 75 percent opt-out rate, the aggregate deficit is $4.06 trillion (only a 1.7 percent decrease).
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“Self-Insured Health Plans: State Variation and Recent Trends by Firm Size, 1996-2013,” and “Auto-IRAs: How Much Would They Increase the Probability of 'Successful' Retirements and Decrease Retirement Deficits? Preliminary Evidence from EBRI’s Retire ..
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“Self-Insured Health Plans: State Variation and Recent Trends by Firm Size, 1996-2013,” and “Auto-IRAs: How Much Would They Increase the Probability of 'Successful' Retirements and Decrease Retirement Deficits? Preliminary Evidence from EBRI’s Retire ..
Summary
Self-Insured Health Plans: State Variation and Recent Trends by Firm Size, 1996?2013
- Federal law provides the legal framework for the uniform provision of benefits by multistate employers to self-insure (or directly fund health care expenses of workers) in order to offer consistent health benefits across states, which results in ease of administration and lower expenses. Self-insured plan sponsors are also not required to cover health care services for state-mandated benefits. In contrast, fully insured plans—plans offered by employers where a premium is paid to an insurance company—are required to cover state-mandated benefits.
- This analysis finds that the percentage of workers in self-insured plans has been increasing. In 2013, 58.2 percent of workers with health coverage were in self-insured plans, up from 40.9 percent in 1998. Large employers (with 1,000 or more workers) have driven the upward trend in overall self-insurance.
- There is concern that passage of PPACA will result in an increasing number of smaller employers offering self-insured plans. However, as of 2013, there is no evidence that smaller firms were increasingly self-insuring their health plans.
Auto-IRAs: How Much Would They Increase the Probability of “Successful” Retirements and Decrease Retirement Deficits? Preliminary Evidence from EBRI’s Retirement Security Projection Model®
- This study analyzes the potential of a generic auto-IRA proposal to increase the probability of a “successful” retirement and decrease retirement deficits.
- Assuming no opt outs, this analysis finds that the introduction of an auto-IRA for households currently ages 35?39 working for small employers, would increase the probability of a “successful” retirement (as measured by the Retirement Readiness Ratings, or RRR) by 8.4 percent, declining as employer size increases. Even in the worst-case scenario (75 percent opt out) there was an increase in RRR, albeit only 2.2 percent for those working for small employers and 1.1 percent for those with large employers.
- Among all families where the head is ages 35–64, the aggregate national retirement deficit (in 2014 dollars) decreases from $4.13 trillion without auto-IRAs to $3.86 trillion (or a 6.5 percent decrease) with auto-IRAs and no opt outs. As opt-out rates rise, there is progressively less reduction in the aggregate deficits; at a 75 percent opt-out rate, the aggregate deficit is $4.06 trillion (only a 1.7 percent decrease).
