ANOTHER OBAMACARE LOOPHOLE: A former insurance executive has sounded the alarm about how small businesses are likely to avoid the expensive burdens of Obamacare: self-insurance. This is when an employer offers a policy to employees, administered by a traditional insurance company, but the employer bears the risk of loss (costs exceeding premiums) itself. And the kicker is that self-insured plans generally buy “reinsurance” (aka, “stop loss” insurance) that kicks in when losses exceed a certain level.
Most large employers are presently self-insured (to get out from under expensive state health insurance mandates), but until recently, self-insurance was relatively rare for small employers because of the inherent risk involved.
Ah, sweet loopholes!