By Bill Olson
Chief Mar­ket­ing Offi­cer at Unit­ed Ben­e­fit Advisors

PharmacyAs a result of the Patient Pro­tec­tion and Afford­able Care Act (ACA) trig­ger­ing cost increas­es for ful­ly insured employ­er-spon­sored health insur­ance plans, more employ­ers are mov­ing to a self-fund­ed mod­el for phar­ma­cy plans, par­tic­u­lar­ly among large employ­ers (1,000+ employ­ees), accord­ing to the 2014 Unit­ed Ben­e­fit Advi­sors (UBA) Health Plan Sur­vey.

UBA’s sur­vey, the nation’s largest bench­mark­ing sur­vey with near­ly 10,000 employ­ers respond­ing, shows that self-fund­ed phar­ma­cy plans have increased 29.8 per­cent (from 8.4 per­cent) in the last five years and ful­ly insured phar­ma­cy plans have decreased 2.7 per­cent (from 91.6 per­cent). Although ful­ly fund­ed phar­ma­cy plans still dom­i­nate with 89.1 per­cent of the mar­ket, self-fund­ed phar­ma­cy plans now make up 10.9 per­cent of all plans, as of 2014.

“Despite the large amount of cap­i­tal nec­es­sary to pay for fluc­tu­at­ing claim costs, self-fund­ing can be more afford­able for phar­ma­cy ben­e­fits,” says a rep­re­sen­ta­tive from TrueNorth Com­pa­nies/MedOne, a UBA Part­ner Firm.

The sur­vey finds that 66.1 per­cent of employ­ers with 1,000+ employ­ees have self-fund­ed pre­scrip­tion plans, while near­ly all small employ­er plans (1 to 99 employ­ees) are ful­ly insured. Region­al dif­fer­ences do have a major impact, how­ev­er. For exam­ple, 99 per­cent of Cal­i­for­nia plans are ful­ly insured, with only the state’s largest employ­ers offer­ing self-fund­ed plans. North-cen­tral employ­ers, on the oth­er hand, have more self-fund­ed plans, at 17.7 percent.

“North-cen­tral employ­ers are more like­ly to self-fund due to the favor­able cli­mate for doing so – less com­pet­i­tive work­force, high­er-than-aver­age con­cern for costs, and a greater amount of man­u­fac­tur­ing and agri­cul­tur­al busi­ness­es,” says TrueNorth Companies/MedOne.

Read UBA’s full press release for more on these find­ings as well as the lat­est trends in stop loss coverage.

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