Unlocking the Next Wave of Opportunities in Employer-Sponsored Health Plans

Employer-sponsored healthcare in the U.S. is undergoing a transformation. Today, over 160M people get their healthcare through employer-sponsored health plans*. For leaders of employer-sponsored health plans, managing the significant growth that has occurred in this space isn’t just about financing—it’s about opportunity. Self-funded plans give organizations the flexibility to innovate, improve outcomes, and reduce costs in ways that traditional insurance never could.

Here are five areas where forward-thinking leaders can seize new opportunities beyond simply passing on escalating healthcare costs to their employees. These suggestions are intended to help address core business needs in both the short and medium term.

Harness the Power of Data

Self-insured employers are uniquely positioned to use data for proactive employee healthcare management. Data from utilization patterns, medical, dental and vision claims, EAP, and pharmacy spend should all be available to create an integrated picture that identifies risks, closes care gaps, and improves outcomes.

• Predictive analytics can flag rising-risk employees before chronic disease worsens.

• Population health tools can highlight employee communities with high ER usage or low preventive screening rates.

• Covariant Analysis to understand what benefits drive different employee health outcomes and business objectives.

By moving from reactive cost management, or worse, accepting high costs as something that cannot be changed, to proactive health support, employers can bend the cost curve while improving employee well-being.

Redesign Care Delivery

Self-funded employers shouldn’t feel they are limited to standard insurance networks. They can design their own care network strategies to improve quality, clinical outcomes, and affordability while ensuring access to specialized care providers with documented records of producing good clinical outcomes for patients.

• Direct contracting with specialized providers or centers of excellence creates high-value networks for mental health, neurodiversity, metabolic conditions and other specialized care areas.

• Bundled payments ensure predictable costs for major procedures while rewarding quality.

• Telehealth and digital health integration expand access and reduce unnecessary utilization.

These innovations allow employers to align healthcare delivery with organizational priorities, from affordability to employee experience.

Measure What Matters

For decades, the standard benchmark for employer plans has been cost per employee per month (PEPM). While important, cost alone doesn’t reflect the true performance of a health plan. It doesn’t include the ability to measure and compare ROI with other organizations with similar cultures and structures.

Progressive leaders are demanding new metrics, such as:

• Preventive care completion rates

• Medication adherence rates for chronic disease

• Time to specialty care access

• Avoidable ER visits

• Employee satisfaction with care

By measuring outcomes and employee experience, not just treatment expenses, leaders can understand and justify the full value of their benefit investments.

Strengthen Trust Through Transparency

Employees often have little visibility into how benefits decisions are made. This lack of clarity can erode engagement. By contrast, employers that communicate openly about provider selection, formulary design, and program goals foster trust.

Clear, proactive communication helps employees understand not only what’s covered, but why. That builds confidence in the benefit team’s decisions and encourages smarter use of the plan.

Another opportunity to build trust is by working with company leaders to understand how benefits can improve employee retention and satisfaction. Benefits programs designed specifically with employee input create tremendous opportunities to build trust and reduce employee attrition.

Influence the Broader System

Employers collectively represent one of the largest purchasers of healthcare in the U.S. As more organizations embrace self-funding, they can push the system toward higher value.

• Demanding Transparent Drug Pricing

• Embrace Lowest Net Cost Pricing Strategies

• Support Value-based Care Mmodels

• Incentivize Preventive and Population Health Approaches

Together, these actions can create ripple effects that extend beyond any single company’s workforce.

The Path Forward

For heads of employer-sponsored health plans, the continued rise in costs necessitates revisions to how you think about your benefits programs. The expansion of self-insured models isn’t just a trend to observe. It’s a call to action.

• Demand access to data that can identify risks and facilitate early interventions.

• Redesign care delivery through direct contracting, bundled payments, and digital health.

• Measure value and outcomes, not just costs.

• Build trust through transparency and communication.

• Leverage purchasing power to shape a more sustainable healthcare system.

The future of employer-sponsored healthcare will be written by the organizations that treat self-funding as a financing model and a platform for innovation that supports key business and plan member goals.

Leaders who embrace these opportunities will not only manage costs more effectively, but also improve health, strengthen retention, and transform benefits into a strategic business advantage.

* Claxton, G., Rae, M., & Winger, A., Employer-Sponsored Health Insurance 101. In Altman, Drew (Editor), Health Policy 101, (KFF, October, 2025) https://www.kff.org/health-policy-101-employer-sponsored-health-insurance/ (accessed November 21, 2025).