Risky health insurance bets could backfire for small employers

Bloomberg Businessweek, June 21, 2013
A growing number of small businesses have tried to reduce their health-care costs in recent years by replacing traditional insurance with self-insured plans. That means that instead of buying policies from big insurers such as Aetna (AET) or WellPoint (WLP), the company sets aside money to pay for workers' medical claims directly. The practice is common at big companies, where a large number of claims make it easier to predict health-care costs. Most small employers, who can face exploding health bills from a single unexpected illness or injury, have still stuck to conventional insurance.

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