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According to a recent survey conducted by United Benefit Advisors (UBA), more large employers are selecting to self-fund their prescription drug benefit plans. According to the survey, an increasing number of employers are turning to the cost-containment benefits of self-funding to avoid the Affordable Care Act (ACA)’s impact on the cost of fully insured health coverage.

Based on data obtain from over 10,000 survey respondents, self-funded prescription drug benefit plans have increased by approximately one third from 2009 to 2014, while fully insured prescription drug benefit plans have decreased by approximately 3 percent. The data also showed that 66 percent of employers with at least 1,000 employees currently maintain a self-funded pharmacy benefit plan.

Employers across the nation are also more likely to implement a layer of stop loss protection for their prescription drug benefit plan. The increasing trend is the result of both the shift to self-funding, as well such ACA requirements as the removal of annual and lifetime limits on health benefits, which open plans up to greater high dollar claim risk and cost exposure. 

Another factor leading employers to elect stop loss coverage for their prescription drug benefit plans is the increased cost of expensive specialty medications used to treat complex disease states.

According to UBA’s survey, approximately 95 percent of self-funded pharmacy benefit plans now include specific stop loss coverage, an increase of almost 7 percent compared to the five preceding years. Approximately 77 percent of self-funded pharmacy plans incorporate a layer of aggregate stop loss protection. 

This trend has grown more rapidly over the same five year period, at a rate of just over 9 percent. In 2014, the average specific stop loss level was $140,235, representing an increase of approximately 14 percent from the four prior years.

by Jessica Marabella