Private Sector Health Insurance Business: A Mid-Year Update

August 22, 2023

Health Benefit Contracts by Participant Pool

A total of 85,994 private-sector employers, in their most recent filings, reported that they offer some type of health benefit (other than vision or dental) that is subject to ERISA [1] guidelines. As reported, these companies collectively make health benefits available to about 88.3 million participants.[2] The following table presents private-sector employers that reported more than 500,000 potential plan participants across the spectrum of health benefit contracts. Amazon remains the top-ranking employer/sponsor, followed by the NEA (National Education Association) Retiree Health Plan, a professional organization representing teachers and other public-school personnel across the nation. ADP, a professional employer organization (PEO), recently achieved the participant threshold to join these other companies.

This assessment of the most recent filings also found 50% of all benefit funding arrangements that included health benefits were self-insured plans. Plans assessed as fully-insured comprised 42%, while the remaining 8% were mixed funding arrangements. Large health insurers generally offer plans across all funding types.

Schedule A Observations

Insurance carrier business was analyzed using Schedule A [3] for benefit contract types of health, HMO, and/or PPO. To provide a high-level overview of the market, the number of insured and total premiums paid were aggregated at the parent company level (Insurer Group) for each health plan/insurance carrier record, summarized in the table below. The Insured field represents the number of persons covered at the end of the policy year, a field synonymous with covered lives or number of enrolled. The # Filings variable represents the number of filings in which each Insurer Group was reported, generally the same as the number of contracts. Total Premiums are the sum of premiums paid for experience-rated and non-experience-rated contracts. It is important to note that Form 5500 definitions and reporting instructions pertaining to health benefits are broad and data are not necessarily indicative of comprehensive medical coverage.

[1] The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. Entities such as churches and state, city, and local governments are generally not subject to ERISA.

[2] “Participants,” per Form 5500 instructions, is defined as the annual count of active and former employees who are eligible for said coverage, but not necessarily enrolled. Furthermore, this field is representative of participants across all health and welfare benefits reported by plan employer sponsors, not just health. Nonetheless, this measure provides a general indication of the potential size of health and welfare benefit contracts by employer.

[3] Employers generally use Schedule A to report information about insurance carriers and benefit plans, including premium amounts and broker/agent commission details for insured plans. Although benefit contract types are indicated within Schedule A, the premium amounts are not reported separately (e.g., health, dental, vision, disability).

[4] Information about benefit plans that are self-insured is generally reported in Schedule C. In many cases, the contracted carrier or TPA (third party administrator) generates this information for the employer. Schedule C provides details on fees associated with self-funded plans that exceed $5,000. Service provider fees are reported separately for direct compensation and indirect compensation arrangements. Although MFA’s data logic strives to eliminate filings that are primarily pension plan purposed, Schedule C does not include reporting of benefit contract types. Therefore, the compensation insights should be interpreted broadly as fees paid for contracts that may include health benefits.