Narrow Provider Networks for Employer Plans

December 2016
Mark A. Hall, J.D., and Paul Fronstin, Ph.D.

A frequently noted effect of the insurance market reforms enacted by the Patient Protection and Affordable Care Act of 2010 (Affordable Care Act or ACA) was the emergence of much narrower provider networks than were previously common. These narrow networks are characterized by offering considerably fewer health providers than is typical in the group market, and they are formed primarily based on price discounting. In a HCFO-funded study, Mark A. Hall, J.D., Wake Forest University, and Paul Fronstin, Ph.D., Employee Benefit Research Institute, conducted in-depth qualitative research to examine questions around provider networks in employer health plans, particularly the development of narrow networks, which have grown in the individual market under the ACA. The researchers found that narrow provider networks do not appear to be crossing over rapidly from the ACA's health exchanges into employment-based health plans.