Does limiting allowable rating variation in the small group health insurance market affect employer self-insurance?

Erin Trish, Bradley J Herring

Research output: Contribution to journalArticle


The Affordable Care Act (ACA) imposes adjusted community rating in the small group market, which employers can avoid by self-insuring, raising concerns about adverse selection. We evaluate the impact of limiting allowable rating variation on employer self-insurance across industries with varied health risk, using cross-state variation in pre-ACA rating regulations, the nationally representative 2008-2013 KFF/HRET Employer Health Benefits Survey, and a triple-difference regression approach. We find that lower risk employers subject to laws limiting allowable premium rating variation have a predicted probability of self-insurance that is about 18 percentage points higher than otherwise-similar higher risk employers, suggesting that these selection concerns are warranted.

Original languageEnglish (US)
JournalJournal of Risk and Insurance
Publication statusAccepted/In press - 2016
Externally publishedYes


ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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