Reduce Employer Healthcare Costs Without Changing Your Health Plan
Companies are increasingly looking for healthcare cost reduction strategies that lower employer costs without disrupting their existing health plan. A proactive approach can generate meaningful FICA savings while enhancing benefits and healthcare access for participating employees.Â
Healthcare Costs Are Accelerating Again
Employer health benefit costs are projected to increase 8.2% per employee in 2027, even after employers make plan changes to control costs. Without cost-reduction measures, employers anticipate an average increase of 11%.
Why Healthcare Costs Keep Rising for Employers
Healthcare costs continue to rise, while many of the traditional responses provide only incremental relief. Plan changes, increased employee cost sharing, and carrier negotiations can help manage expenses, but they may not address the underlying cost dynamics.
Reactive Healthcare
Employees often engage with healthcare after conditions have progressed, when treatment can be more complex and costly.
Limited Cost Levers
Employers frequently rely on plan design changes, cost shifting, and carrier negotiations to manage annual increases.
Missed Opportunities
Existing benefits structures may contain opportunities to reduce employer costs while providing greater value to employees.
The opportunity is not simply to manage rising healthcare costs. It is to change the economics around them.
A Different Approach to Employer Healthcare Costs
Rather than replacing the existing health plan, the strategy works alongside it to improve the economics for both the employer and participating employees.
Employer Payroll Savings
A compliant pre-tax benefits structure can reduce taxable payroll, generating approximately $640 in annual employer FICA savings per participating employee.
Healthcare Cost Reduction
Earlier access to care and ongoing employee engagement can help reduce avoidable utilization and improve the healthcare cost trajectory over time.
Greater Employee Value
Participating employees gain access to additional healthcare and wellness benefits designed to improve access, engagement, and overall benefit value.
The result is a strategy that can create immediate payroll savings while addressing longer-term healthcare cost performance.
Changing the Healthcare Cost Trajectory
Traditional healthcare costs can continue rising even as employers make annual plan adjustments. Improving employee engagement and access to care creates an opportunity to moderate that trajectory over time, helping healthcare expenses grow at a more sustainable rate relative to the organization.
How the Employer Healthcare Strategy Works
A supplemental healthcare and wellness strategy works alongside the existing health plan to create value for both the employer and participating employees.
Add the Supplemental Benefit Structure
Add a compliant supplemental healthcare and wellness program is implemented alongside the employer's existing health plan. The existing carrier, network, and core plan remain in place.
Employees Participate and Engage
Eligible employees who participate receive access to healthcare and wellness benefits designed to encourage earlier and more convenient engagement with care.
Employer & Employee Economics Improve
The pre-tax structure reduces taxable payroll, creating employer FICA savings, while the healthcare benefits can help improve employee access and support longer-term healthcare cost performance.
No carrier replacement. No major health plan redesign. Works alongside the benefits already in place.
Potential Employer and Employee Impact
The strategy can create measurable employer savings while enhancing healthcare access and employee benefits, without replacing the existing health plan.
~$640
Annual Employer FICA Savings
Approximate annual employer payroll tax savings per participating employee.
~$160
Potential Monthly Employee Benefit
Illustrative monthly improvement in employee take-home pay based on plan structure and participation.
$0
Employee Cost for Included Care
Included preventive, virtual care, wellness, and pharmacy services are available without copays or deductibles.
1,000+
Included Medications
Access to more than 1,000 included medications at no cost to the employee.
Results vary by employer, employee participation, plan structure, wages, elections, applicable taxes, utilization, and other factors. Illustrative figures are not guaranteed.
Healthcare Benefits Employees Can Actually Use
Participating employees receive access to a comprehensive set of healthcare, wellness, and pharmacy benefits designed to make care easier to access, encourage earlier engagement, and reduce out-of-pocket barriers.
Primary Care
Personalized ongoing care, chronic-condition support, and convenient access to primary care.
Urgent Care
24/7/365 virtual access for unexpected healthcare needs and rapid treatment.
Pharmacy
1,000+ included medications with convenient delivery and refill support.
Mental Health
Confidential access to mental health professionals for immediate and ongoing support.
Weight Support
Lifestyle coaching, nutrition resources, and access to physician-directed weight management support.
No carrier replacement. No major health plan redesign. Works alongside the benefits already in place.
Built on an Established Benefits and Tax Framework
The strategy is structured within established employer-benefit provisions of the Internal Revenue Code and supported by formal plan administration, documentation, and compliance processes.
Section 125 Plan Structure
Eligible employee elections are administered through a compliant pre-tax benefits structure.
Section 105 Medical Reimbursement
Qualified medical expenses are reimbursed through a formal employer-sponsored medical reimbursement arrangement.
Compliance and Administration
Plan documents, substantiation, nondiscrimination testing, employee communications, and ongoing administration support proper implementation.
The program is designed to work within the employer's existing benefits environment, with implementation and administration handled through the program's compliance infrastructure.
Employer Healthcare Insights
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Frequently Asked Questions
Get answers to common questions about the employer healthcare strategy, how it works, what it includes, and how it can benefit employers and participating employees.
No. The strategy is designed to work alongside an employer’s existing group health plan. The current carrier, provider network, and core medical plan can remain in place.
See What This Strategy Could Mean for Your Organization
A brief discovery call can help determine whether your organization may be a fit and provide an initial view of the potential employer savings and employee benefits.
No health plan replacement. No major benefits redesign. Just a conversation to determine potential fit.