The Obama administration introduced the Affordable Care Act (ACA) in an attempt to temper medical cost inflation and decrease the uninsured rate. For this reason, industry research firm IBISWorld has updated a report on Health & Welfare Funds.

NEW YORK, Dec. 29, 2016 /PRNewswire/ — The industry provides healthcare coverage and welfare-related benefits to employees, unions and other professional associations. Thus, industry operators function in a similar manner as pension funds and other employee benefit programs.

For the full report, visit IBISWorld’s Health & Welfare Funds in the U.S. industry report page.

In the five years to 2016, industry revenue is expected to decrease an annualized 2.0% to $189.3 billion. Over this period, a consistent increase in healthcare expenditures (i.e. medical cost inflation) forced industry operators to consistently raise premiums and increase reserves to ensure healthcare liabilities are properly funded. This occurrence, combined with a relatively weak and volatile stock market, has taken its toll on industry profit margins. Weak profitability has driven the number of industry enterprises to nearly stagnant growth.

According to IBISWorld Industry Analyst Kelsey Oliver, “The ACA, which took full effect in 2014, could prove to be detrimental for this industry because the legislation does not provide it with subsidies that are afforded to subscribers of for-profit plans.” Industry operators fear that this will discourage union membership, a major driver for the industry, and could reduce revenue. Nevertheless, the effect ACA will have on this industry remains unclear. Overall, in the five years to 2021, industry revenue is expected to grow at a moderate annualized rate.

Similar industries:
Portfolio Management
Health & Medical Insurance

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IBISWorld Industry Report Key Topics

Industry Performance
Products & Markets
Globalization & Trade
Major Companies
Operating Conditions
Key Statistics

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every U.S. industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. For more information, visit or call 1-800-330-3772.

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