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Small-group market shifts as non-ACA plans gain enrollment share
From 2014 to 2024, ACA community-rated small-group premiums rose 46 percent, while experience-rated plans rose 35 percent, with faster community-rated premium growth in states where such enrollment fell below 25 percent.
The small-group health insurance market has split between ACA community-rated plans and alternatives such as self-insured and non-community-rated options, with a new Congressional Budget Office report documenting the shift over the past decade. Insurance Business reports that self-insured and non-community-rated plans accounted for 18 percent of enrollment in 2014, rising to 46 percent by 2024, while community-rated plans fell from a 60 percent peak in 2018 to 50 percent.
Level-funded plans have driven much of the migration, according to the report summarized by Insurance Business. These arrangements combine self-insurance with stop-loss coverage and flat monthly payments, and stop-loss policies cap an employer’s exposure when individual claims exceed a set threshold, making budgeting easier for smaller firms.
The outlet reports that the cost pattern behind the shift appears in premium data. From 2014 to 2024, average premiums in ACA community-rated small-group plans increased 46 percent in nominal terms, compared with 35 percent for experience-rated plans.
Insurance Business also highlights how the dynamic varies by state and feeds itself over time. It says that in states where community-rated enrollment dropped below 25 percent of the small-group market, premium growth ran well above the national average, and community-rated pools became more concentrated with higher-risk enrollees, raising costs and encouraging additional lower-risk groups to leave.