The uncontrolled loss of accelerated secondary electrons in plasma source ion implantation (PSII) can significantly reduce system efficiency and poses a potential x-ray hazard. This loss might be reduced by a magnetic field applied near the workpiece. The concept of magnetically insulated PSII is proposed, in which secondary electrons are trapped to form a virtual cathode layer near the workpiece surface where the local electric field is substantially reduced. Subsequent electrons that are emitted can then be reabsorbed by the workpiece. Estimates of anomalous electron transport from microinstabilities are made. Insight into the process is gained with multidimensional particle-in-cell simulations.